Judgment:
1. The Collector of Central Excise, Aurangabad has filed this appeal as directed by Central Board of Excise & Customs who had reviewed the order-in-original passed by the Additional Collector of Central Excise, Aurangabad in the case of Arvind Detergents (P) Ltd. who are respondents herein. The Additional Collector had held vide his impugned order that they were eligible for the benefit of Notification 175/86, dated 1-3-1986 in respect of their clearance during the period April 1989 and May 1989.
2. In corning to the said conclusion, the Addl. Collector had taken into account the effect of amending Notification 174/89, dated 1-9-1989 which permitted the exclusion of the value of clearances of goods manufactured with the brand name of another person not eligible for the benefit of said small scale exemption notification. By applying the said amendment, the value of clearances of the goods manufactured and cleared by the respondent company during the year 1988-89 fell below the exemption level of Rs. 1.5 crores and accordingly, it was held in the impugned order that the respondents were eligible for duty free clearance of their goods cleared during the months of April and May 1989.
3. In the appeal filed by the department, it has been contended that the amending Notification No. 174/89 was issued on 1-9-1989 and it can have only prospective effect and accordingly, it cannot apply to clearances during the months of April and May 1989. In other words, the contention in the appeal is that this notification cannot have retrospective effect.
4. The respondent is not present in spite of notice issued on 25-9-1997. However, we are proceeding to dispose of the appeal after hearing Shri M. Ali, learned DR.5. The contention raised in the appeal are reiterated by Shri Ali. We have considered the submissions and also gone through the record.
Notification 174/89, dated 1-9-1989 amended Notification 175/86, dated 1-3-1986 by providing for the exclusion of the value of clearances of excisable goods affixed by the manufacturer with the brand name or trade name of another person not eligible for the grant of exemption under that notification from the aggregate value of clearances in the previous year for deciding the admissibility of Notification 175/86.
This notification was not applicable for a manufacturer whose aggregate value of clearances in the previous year exceeded Rs. 1,50,00,000/- (Rs. Hundred and Fifty lakhs). By the amendment in question, this ceiling was to be reckoned, by excluding the value of clearances of goods cleared under the brand name of another manufacturer. Such goods were not eligible for the benefit of Notification No. 175/86 by an express provision, viz. paragraph 7 thereof. The contention raised in the present appeal is that the amending notification being dated 1-9-1989 it will not be applicable to clearances effected in April and May 1989 on payment of duty by applying the ceiling of Rs. 150 lakhs on the clearances made in the previous year 1988-89 viz. 1-4-1988 to 31-3-1989 as applicable at the time of their clearance. It is contended that the benefit of amendment by applying the ceiling of Rs. 150 lakhs, by excluding the value of clearances of goods affixed with the brand name of another manufacturer will be available only for the goods cleared after the date of the said amending notification, namely 1-9-1989 and not applicable for goods already cleared on payment of duty before its issue. The Additional Collector has passed the impugned order granting the benefit of the amendment to clearances made in April and May 1989 by holding that the amendment related to value of clearances in the previous year and is applicable to the clearances in the relevant running year and hence the clearances in April and May 1989 of that year were eligible for the benefit. We are inclined to hold that he has decided the matter correctly. The subject amendment relates to the value of goods cleared in the previous year and once that value is altered by applying the amending notification, the effect of that will be available to the clearances made in the relevant year.
In the present case, the value of clearances for the year 1988-89 which exceeded Rs. 150 lakhs by including the value of goods manufactured by respondent and affixed with brand name of another manufacturer fell below that level by excluding the value of clearances of such goods affixed with another person's trade mark. As the amendment relates to clearances effected in. the previous year and the exemption is for the goods cleared in a financial year, the decision of the Additional Collector to extend the benefit of the amendment to clearances made in the financial year in question namely clearances in April and May 1989 is correct and we uphold the same. In this connection two Tribunal decisions were brought to our notice. The earlier of the said two decisions is in Collector of Central Excise v. Power & Control, 1992 (62) E.L.T. 662 wherein the manufacturer cleared goods bearing his own brand name besides goods affixed with brand name of another manufacturer. On the latter goods the exemption under Notification 175/86 was not applicable. It was held by the Tribunal that the goods chargeable to normal rate of duty being not entitled for small scale industry exemption are to be treated as goods cleared not in terms of Paras l(a) and l(b) of the exemption Notification 175/86. On that reasoning the Tribunal held that the goods cleared with a non-entitled manufacturer's brand name on payment of duty need not be taken into consideration for the purpose of computing aggregate value of first clearances of Rs. 15 lakhs. We thus find that this decision was on a different issue namely computing the value of clearances up to Rs. 15 lakhs in the year of assessment while in the case before us the relevant ceiling is Rs. 150 lakhs for the clearances of the previous year. The aforesaid decision related to clearances in a financial year before the amendment in question had come into force. However, it is notworthy that even without the application of the amending notification which specifically provided for the exclusion of the value of clearances of goods affixed with a non-entitled another manufacturer the Tribunal gave the same beneficial treatment to while computing the value of clearances of goods to decide eligibility for duty free benefit. In another appeal viz. Akhil Dharma Pvt. Ltd. v. Collector of Central Excise, Hyderabad reported in 1996 (83) E.L.T. 385, the Tribunal was concerned with Notification 175/86 as amended by the same Notification 174/89, dated 1-9-1989. The departmental authorities had held that the exclusion of the value of branded goods of another manufacturer introduced by the amending Notification 174/89 could only be made in the future and not retrospective. The Tribunal disagreed with this view and held that the appellant therein was eligible to get the benefit of the amendment for clearances made after that amendment viz. 1-9-1990. Thus the issue before us in the present appeal was not before the Tribunal in the said case. In that impugned order the Tribunal was not called upon to decide the issue whether the benefit of the amendment brought out by Notification 174/89, dated 1-9-1989 in regard to the computation of value of clearances in the previous year viz. 1988-89 will affect the clearances in the relevant year involved in the dispute namely April 1989-March 1990 during the period prior to 1-9-1989, in other words, during the period 1-4-1989 to 31-8-1989. As we have already held earlier in this order the amendment in question relates to the value of clearances in the previous year which determines the eligibility for exemption in the relevant year. By the very fact that the subject amendment relates to the clearances in the previous year it is retrospective in nature and the clearances in the relevant year would be regulated by the changed criterion relating to the value of clearances in the previous year. Accordingly, we agree with the finding reached by the Additional Collector in his impugned order. We uphold the same and dismiss the appeal.