ORDER
Shiben K. Dhar, Member (T)
1. This appeal is directed against the Order-in-Appeal No. 83-CE/Alld./89. The appellants obtained stampings and laminations for manufacture of electric fans. These stampings and laminations were at the first stage used in the manufacture of electric motors which subsequently were used in the manufacture of fans. The appellants claimed benefit of Notification 95/83, dated 1-3-1983. The benefit was refused to them on the ground that they did not pay any duty on electric motors.
2. Arguing for the appellants, the ld. Advocate submits that Notification 95/83 clearly allowed set off duty to electric stamping used in the manufacture of electric motors and also duty set off on electric motors used in the manufacture of electric fans. What was intended was that electric fans should get duty relief to the extent of duty paid on inputs whether electrical stampings or electrical motors. It is true that they did not pay any duty on electric motors since these electric motors were independently exempted for captive consumption. Proforma credit could not be denied in case an intermediate product emerges which is otherwise exempted from the duty. He cites the case of C.C.E., Kanpur v. Vansals Electricals Pvt. Ltd. – 1996 (87) E.L.T. 285 (Tribunal) in his support. He also submits that there is absolutely no bar to grant of exemption in such cases and cites in this connection the case of National Organic Chemicals Inds. Ltd. v. C.C.E., Bombay-III -1994 (70) E.L.T. 722 (Tri.).
3. Ld. DR submits that whereas such credit could be allowed in case of normal Rule 56(A) procedure, what we are dealing herewith is a set off proceedings and therefore Collector was correct in rejecting such claim. Even otherwise under relevant provisions of Rule 56(A) as it existed at that time they could apply to the Collector for provisional credit and such provisional credit in circumstance where it was not possible to avail it, could have been refunded. No such procedure was followed.
4. We have heard both sides. The Notification 95/83, dated 1-3-1983 is basically a set off notification. Under S. No. 7 of this notification electric stampings are described as inputs and electric motors as finished product. Again at S. No. 16 Electric Motors, Stators, Rotors and Die-cast Rotors are inputs in electric fans as finished product. In other words, what is clear is that certain finished products are given duty relief to the extent of duty paid on electrical stamping and laminations or electric motors. It is true that appellants did not pay any duty on electric motors. At the same time, however, it is clear from the Appeal-memo, that subsequent to instructions issued by C.B.E.C. under letter dated 11th April, 1984, they had the option to pay duty on the electric motors. In fact, they made this offer to the Collector, but they were not given this option. We find that the Collector (Appeals) has rejected the appeal on the ground that they have not paid the duty on inputs and Rule 56(A) does not provide for refund in cash except in special circumstances specified under Rule 56(A)2(c). The position now is well settled that even cash refund is admissible in special circumstances (See case of National Organic Chemicals supra and Pratap Steel Rolling Mills v. C.C.E., New Delhi -1996 (87) E.L.T. 188 (Tribunal). Collector (Appeals) has given no findings at all on the rejection of the offer made by them to pay duty on electric motors. The net effect in Revenue terms whether or not they had paid duty on electric motors would remain same so long as stamping and laminations were duty paid and electric fans were liable to duty as finished product. This is clear from Hon’ble Supreme Court’s judgment in case of Steel Authority of India Ltd. v. Collector of Central Excise, Bolpur -1997 (90) E.L.T. 287 (S.C.). Ministry’s instructions dated 11-4-1984 an option had been clearly given to the appellants to pay duty on electric motors. In their appeal memo, also (Page 7 of the Appeal papers) they made a categorical statement that vide their letter dated 28-9-1984, they had requested Assistant Collector to allow them to pay duty on electric motors and that they would not avail exemption under Notification 95/83. They were not given any decision in this regard.
5. Considering all the facts and circumstances of the case including the fact that Collector (Appeals) has not given any finding on their offer to pay duty on electric motors and Ministry vide letter dated 11-4-1984 clearly indicated that such offer could be accepted, we are of the view that order of the Collector is non-speaking. Collector (Appeals) ought to have looked into this aspect of the matter including the fact that in such circumstances cash refund is admissible. We, therefore, set aside the impugned order and remand the matter to the Assistant Collector, Central Excise, for examining the admissibility of the claim. The appellants shall be heard in person and they would be at liberty to produce such additional evidence as they consider would support their case.