Judgment:
1. The issue in the appeal relates to the benefit of Notification 24/91 as amended in respect of cement manufactured out of clinker purchased from outside. The notification extends the benefit to the cement produced in factories by use of vertical shaft kiln. The issue is covered by an earlier decision of this Bench. The respondents have sought for adjournment. Since, it is a covered matter, we decline the request for adjournment and proceed to decide the appeal itself. The ld. JDR for the department has stated that the ld. lower authority has not appreciated the scope of the notification. The use of the kiln for the manufacture of the cement for the purpose of the notification is a condition precedent. In the present case admittedly the clinker was purchased from outside and the cement manufactured. A reading of notification does not lend itself to the interpretation as sought to be placed by the respondents that once they have the vertical shaft kiln, they need use it for the manufacture of cement and cement manufactured even without the use of the vertical shaft kiln will be entitled to exemption. He has also pressed in support of his plea the ratio of decision of the Tribunal in the case of CCE v. Shankar Cements Co.
-1995 (78) E.L.T. 362.
2. The respondents are absent. The respondents urged following pleas in their cross objection which is in nature of cement.
Reference to the type of kiln in the above Notification had been made only because of the quanta of benefits are different for the two types of kiln (99000 TPA with eligibility upto 198000 TPA) and obviously not for the reason that the clinker should have been produced within the factory. In this context, it would be relevant to invite attention to the wordings used in Notification No. 36/87-C.E. and 124/87-C.E., dated 29-4-1987, where the production of cement through captive use of clinker was made compulsory. However, the basis of benefit under Notification No. 24/91-C.E. IS NOT THE COST OF INSTALLATION over the specified periods, but the cost of production vis-a-vis that of the larger plants. That being the position, the source of clinker (i.e.
whether own or purchased) is not relevant, so long as the other conditions are satisfied. CLINKER is just an input which remains exempt from duty whether under Notification No. 7/92, dated 1-3-1992 or under Modvat scheme which allows the grant of credit of duty on the inputs, if so paid. It will be appreciated from all possible angles, there can be no valid reason for the denial of the benefit of Notification No.24/91-C.E. in the case of Cement manufactured out of clinker brought from outside so long as the Cement plant is complete with KILN AS ENVISAGED in the Notification. Hence the respondents pray that the order-in-appeal passed by the commissioner (APPEALS) may please be upheld and the appeal disallowed.
It may please be noted that in the earlier Notification No. 36/87-C.E.and also in the later Notification No. 5/94-C.E., dated 1-3-1994 as amended by Notification No. 82/94-C.E., dated 7-4-1994, a condition was laid in both the above Notifications that the concessional rate of duty is eligible only if the Cement manufactured out of clinker produced in the same factory. But in Notification No. 24/91-C.E., there was no such condition that the cement should have been manufactured out of clinker produced in the same factory.
It is respectfully submitted that as regards interpretation of exemption Notification the meaning of the Notification must depend primarily on the terminology used in the Notification as held by the High Court of Bombay in the case otjenson & Nicholson v. Union of India -1981 (8) E.L.T. 128 (Bom.). Every word in the exemption Notification should be strictly construed as per the decision of the Honourable Tribunal in the case of Chamundi Vastralangaran Udyog v. Collector reported in -1987 (32) E.L.T. 131 (Tribunal). While interpreting the Notification there is no room for intentment and unless meanings flow from the clear language of the Notification the benefit cannot be given or denied by reading the intention into it, as may be seen from the decision of the Tribunal in the case of Quality Steel Tubes v.Collector - 1987 (30) E.L.T. 447 (Tribunal).
Again if the exemption notification is capable of more than one interpretation or there is doubt in relation to their interpretation, the interpretation which would reduce the incidence of tax or enlarge the ambit of the exemption should be adopted, as held by the Bombay High Court in the case of Deccan Sales Corporation v. Parthasarathi -1982 (20) E.L.T. 885 (Bom.). Similarly, when there is any doubt, the benefit of it must go to the assessee, so that the tax burden lessened, as per the decision of the TRIBUNAL in the case of Indye Chemicals v.Collector reported in 1988 (25) E.L.T. 318 (Tribunal). In the light of the above decisions, it is submitted that the observation of the original authority to say the concession will not be available to the cement produced in the factory, when the clinker is brought from outside factory, is untenable and the denial of the concession eligible to the factory under Notification No. 24/91-C.E. as amended is not justified. Hence the respondents pay that the order-in-appeal may please be upheld and the appeal disallowed.
3. We have considered the pleas made by both the sides. We observe that the concession is available in terms of the notification in respect of cement manufactured using verticle shaft kiln. The use of verticle shaft kiln has to be there in the context of manufacture of cement. The kiln is used for the manufacture of clinker and out of which the cement is manufactured. A reading of notification does not lend itself to the interpretation as sought to be placed by the respondents that once they have the verticle shaft kiln, they need not use it for the manufacture of cement, so long the cement is shown to have been manufactured in their factory. The concession is for cement which is produced by the use of kiln. The cement manufactured out of the clinker purchased from outside cannot be taken to have been manufactured by using the verticle shaft kiln in the factory. We have also in the case of M/s. Vivek Textiles-Mills Ltd. v. CCE, Hyderabad in Appeal No. E/R-755/MAS, decided on 16-5-1996 in the context of Notifications 253/82, dated 8-11-1982 and 297/79, dated 24-11-1979 where the concession is available in respect of fabrics which are subjected to certain specified process held that notwithstanding the fact that in the factory of the assessee machinery for subjecting the fabrics to other process was available, the assessee could not be denied the benefit in case the fabrics are subjected only to the specified process. What we have held therefore is that it is not the installation of a machinery in the factory which is the relative consideration for the benefit of Notification, but it is the process to which the goods are subjected that which would determine the eligibility to the benefit of the Notifications. In this connection we have held in our order No. 832/82, dated 16-5-1996 as under in para 4 : 4. We have considered the submissions. The learned lower authority has stated that the appellant had manipulated the raw material register in Form-IV to show receipt of grey cotton fabrics although man made fabrics were actually received by them based only on vague allegation made in the impugned order without any evidence in this regard.
Further, the impugned order itself has not narrated the facts very clearly. In para 20 of the order, it is stated by the adjudicating authority that from the delivery challans attached to the lorry receipts seized from Bombay Andhra Transport it was clear that the fabrics covered were nothing but man made fabrics which had undergone the dutiable processes like bleaching and printing etc. In this connection, it is seen that in the show cause notice at para 4.5, the allegations are to the effect that the lorry receipt copies of the transporter of the grey cloth had certain slips attached with them giving the particulars of the supplier and the nature of the fabric, etc. Therefore, the show cause notice has clearly mentioned that the goods which were covered under the lorry receipts were grey cloth. In that view of the matter, it is seen that the observation of the adjudicating authority that these lorry receipts showed that the goods are dutiable is not borne out by the records. On the contrary it is seen that this finding is against the allegation, itself made in the show cause notice. The other finding of the adjudicating authority is that the appellants are having certain machines in their factory which could be used for the purpose of manufacturing the dutiable goods. The mere fact that the appellant had such machines in the factory will not disentitle the appellant to clear those goods which were not subjected to only processes which were covered by the exemption notification.
There must be evidence to show that the appellants had processed the goods attracting duty by using those machines. Such an evidence is not coming forth in this case and without any such evidence the finding of the adjudicating authority that merely because they possessed certain machines in this regard is not sufficient to fasten the duty liability on the appellants. No other evidence was relied in the impugned order to show that the appellants are liable to pay duty. The learned DR also could not point out any satisfactory evidence in this regard which were discussed by the adjudicating authority in the impugned order. In this view of the matter, we find that there is no reliable evidence in this case to show that the appellant is liable to pay duty in this regard.
In the facts and circumstances, therefore, the appellant is entitled for the benefit of doubt. The demand of duty in terms of the impugned order is not sustainable. The appeal is thus allowed and the demand of duty in terms of the impugned orders are hereby set used. We set aside the order of the adjudicating authority.
We have likewise ruled in another case reported in 1995 (60) ECR 126 (sic). Likewise, in the present case, the concession would be available if the kiln itself by the used assessee for the manufacture of cement in question. If the clinker is purchased from outside and the kiln is not used for the purpose, the benefit may not be therefore available in respect of the cement which is generated out of the clinker purchased from outside. In the above view of the matter, we hold that the appeal of the Revenue has to be allowed. We, therefore, hold that the lower authority was in error in having allowed the benefit of the Notification in question to the respondents. The respondents would be therefore eligible to the benefit of Notification to the extent the cement which is generated out of the clinker which may have been manufactured by use of the vertical shaft kiln in the factory. The appeal of the Revenue is therefore allowed.