ORDER
Shri G.A. Brahma Deva
1. This appeal arises out of and is directed against the impugned order dated 28-4-2000 passed by the Commissioner of Customs and Central Excise (Appeals), Bangalore.
2. Arguing for the appellant Sh. J. Shankar Raman, Ld. Adv submitted that short point to be considered in this case is whether additional duty of Excise is exempted or not in terms of Notification 214/86 CE dated 25-3-86.
3. Facts of the case in brief are that the appellants are engaged in the manufacture of Nylon Tyre Cord Fabrics, which attract, an additional excise duty at the rate of 5% leviable under the Additional duties of Excise (Goods of Special Importance) Act, 1957 for the period from 1-2-97 to 31-3-97. The appellants received raw materials namely Nylon Filament Yarn from the Tyre companies and manufactured the Tyre Cord Fabrics and sent the same to raw materials suppliers i.e. Tyre Companies by following the procedure prescribed under Notification No 214/86-CE dated 25-3-1986. The appellants have also been following the job work procedures under rule 57F (3) and 57-F(4) of the Central Excise Rules. It was the contention of the party before the authorities below, since the Raw Materials are received under challans prescribed under Rule 57F (3) and 57F(4) and the processed goods are sent back to Tyre manufactures after the job work by following the procedures prescribed under Notification No 214/86 under the same challans prescribed under rule 57F(3) and 57F (4), they are not liable to pay any Additional Excise duty and the same to be borne by Tyre Companies. They have become unsuccessful before the authorities below. Hence this appeal.
4. Sh. Shankar Raman, Advocate submitted that Notification No 214/86 exempts the duty of Excise in respect of the goods specified therein since goods manufactured in a factory as a job work. Excise duty includes Additional duty of Excise since provisions of Central Excise Act and Rules applicable in toto as envisaged under Section 3 of the Additional Duties of Excise (Goods of Special Importance) Act 1957. Supreme Court also held in the case of Ujagar Prints V/s Union of India reported in 1988 (38) E.L.T. 535 that what applies to the meaning levy applies to the Additional Duties as well He submitted that Additional duty of Excise is only Excise Duty and accordingly since Notification exempts Excise Duty, Additional Duty of Excise being of the same nature as duty of Excise, Department is not justified in denying the exemption in terms of Notification No 214/86. He placed reliance on CBEC Circular No 278/112/96-CX dated 11-12-96 wherein it has been clarified that the basic duty is exempted then Additional Duty of Excise is also exempted. Further, he relied upon the decision of the Tribunal in the case of Collector of Central Excise, Madurii Versus Vijayakumar Mills Ltd 1999 (110) E.L.T. 956 and Anjali Transprints Vs Commissioner of Central Excise, Bangalore reported in 1998 (29) R.L.T. 305 wherein it was held that Additional Duties of Excise paid on yarn under Additional Duty of Excise eligible for proforma credit Additional Duty of Excise being of the same nature as Union Duty of Excise.
5. On the other hand, Smt Radha Arun, Ld. SDR appearing for the Revenue submitted that issue involved in this case has been clearly covered by the decision of the Supreme Court in the case of Union of India and others Vs Modi Rubber Ltd. and others reported in 1986 (25) E.L.T. page 849. However, she said that the decisions referred to by the other side are not applicable to the facts of this case since those decisions were with reference proforma credit and in the context of unqualified clause; whereas the present Notification specifically exempts only basic duty.
6. Shri Shankar Raman, Advocate replied that issue with reference to the Additional Duty in terms of Section 3 of Additional Duties of Excise (Goods of Special Importance) Act 1957 has not been considered by the Supreme Court in the case of Modi Rubber Ltd. and further this position has been analysed by the High Court of Gujrat in the case of Maheshwari Mills Ltd. Vs Union of India reported in 1992 (58) ELT page 9. He referred to the para 38 of the said decision which is as under :-
“Learned counsel for the intervenor drew our attention to the decision of the Supreme Court in the case of Union of India and Others Vs Modi Rubber Limited and Others, reported in 1986(25) ELT 849(SC). In that case the question of construction of the expression ‘duty of excise’ occuring in two notifications issued under Rule 8 (1) of the Central Excise Rules, 1944 occured. In that context the Supreme Court held that the expression ‘duty of excise’ is required to be construed in the context in which it occured. Therein the Supreme Court held that the phrase ‘duty of excise’ referred to in the notification will be confined to the basic duty of excise and would not cover special excise duty also. The observations made by the Supreme Court in the course of the judgement while deciding the aforesaid question are of no help to the petitioner, for it is well settled law that a decision is an authority for the question which it actually decides. In the case of Modi (supra) the Supreme Court has decided the meaning of the phrase ‘duty of excise’ occuring in two notifications and that too for the purpose of deciding the extent of exemption granted. It has not laid down any principle which would be helpful for interpreting the provisions of the Act of 1978.
7. We have carefully considered the matter. There is lot of force in the arguments advanced on behalf of Revenue. The notification No 214/86 CE dated 25-3-86 was issued under sub rule 8(1) of Central Excise 1944. It exempts only duty of excise. There was no reference to any other statute and hence the exemption granted under the notification must be construed as limited only to the duty of Excise under the Central Excise Act 1944. Precisely this was the view of Supreme Court in the case of Modi Rubber Ltd. (supra). While interpretting the similar notification Nos 123/74-CE, and 27/81-CE it was held that the expression ‘duty of excise’ is required to be construed in the context in which it occured. Further held that the phrase ‘duty of excise’ referred to in the notification will be confined to the duty of Excise and would not cover special excise duty also. The observations made by the Supreme Court therein is relevant in this context and same is as under :-
“It is obvious that when a notification granting exemption from duty of excise is issued by the Central Government in exercise of the power under Rule 8 (1) simpliciter it must by reason of the definition of duty contained in Rule 2 clause (v) be projected in Rule 8 (1) as granting exemption only in respect of duty of excise payable under the Central Excises and Salt Act. Undoubtedly, by reason of sub-section (4) of Sec. 32 of the Finance Act, 1979 and similar provision in the other Finance Acts, Rule 8 (1) would become applicable empowering the Central Government to grant exemption from payment of special duty of excise. But when the Central Government exercises this power, it would be doing so under Rule 8 (1) read with sub-section (4) of Section 32 or other similar provision. The source of power in such a case would not be just Rule 8(1), since it does not of its own force and on its own language apply to granting of exemption in respect of special duty of excise, but the reference would have to be to Rule 8 (1) read with sub-section (4) of Section 32 or other similar provision. In view of this during all these years whenever exemption is sought to be granted by the Central Government for payment of special duty of excise or additional duty of excise, the recital of the source of power in the notification granting exemption has invariably been to Rule 8 (1) read with the relevant provision of the statute levying special duty of excise or additional duty of excise as the case may be. It is, therefore, clear that where a notification granting exemption is issued only under sub-rule (1) of Rule 8 of the Central Excise Rules, 1944 without reference to any other statute maing the provisions of the Central Excise and Salt Act, 1944 and the Rules made thereunder applicable to the levy and collection of special, auxillary or any other kind of excise duty levied under such statute, the exemption must be read as limited to the duty of excise payable under the Central Excise and Salt Act, 1944 and cannot cover such special, auxillary or other kind of duty of excise. The notifications in the present case were issued under sub-rule (1) of Rule 8 of the Central Excise Rules, 1944 simpliciter without reference to any other statute and hence the exemption granted under these two notifications must be construed as limited only to the duty of excise payable under the Central Excise Act, 1944.”.
8. In the facts of circumstances and particularly in view of the wordings of the notification, as the notification exempts only basic duty, following the ratio of the aforesaid decision, we do not find any informity in the impugned order. Accordingly, the appeal is dismissed.
Pronounced in Open Court on 07.02.2001