M/S. Gajran Corporatin, M/S. Sai Vs. Commissioner of Central Excise - Court Judgment

Excerpt:

.....the benefit under para 1 (a) (i) was wrongly taken and the differential duty was demanded. in all cases the commissioner (appeals) vide the common order upheld the confirmation.hence the present appeals.4. as observed above, notification no. 1/93 gave two options. the first option was taken by the assessees. in taking the option they were clearly wrong. therefore for the duration covered by the proceedings, the department recovered the differential duty. at the same time however, the second option for clearance without payment of duty was also available. in that case the assessees themselves could seek refund of the duty paid by re-exercising their option and claiming the benefit of part (ii) of the said provisions.5. the tribunal in their judgement in the case of jai industries vs.collector of central excise [1993 (68) elt 475] was dealing with an issue arising out of the earlier notification no. 175/86. in that case the appellants had filed a declaration in order to take benefit of clause (i). they however, did not take any credit but cleared the goods at concessional rate of duty. differential duty was demanded. the tribunal observed that even if the declaration had been.....

Judgment:

1. These bunch of 17 appeals, although filed by different assessees, covers the same point and is therefore taken up together for disposal in this common order.

2. We have heard Shri MN Sayed for the appellants and Shri BK Choubey for the Revenue.

3. The appellants Draw Texturised Partially Oriented Yarn. The inputs and outputs were covered under the proforma credit scheme under Rule 56A with effect from 1.3.87, vide Notification No. 84/87. Notification NO. 1/93 which superceded Notification No. 175/86, prescribed concessional rate of duty based on value of clearances by SSI units.

Vide amendment dt. 25.4.94 the input and output were specified for benefit under this notification. This notification gave two options.

The first was that the assessees could pay concessional rate of duty and avail of modvat credit. The second option was not to pay any duty and not to avail of modvat credit. The assessees in these cases opted for the first option as soon as goods were notified under Notification No. 1/93. However the modvat credit facility was extended to the inputs brought under the scheme only from 20.5.94 by virtue of Notification No. 24/94. Show cause notices were issued alleging that during the period 25.4.94 to 19.5.94, the benefit under para 1 (a) (i) was wrongly taken and the differential duty was demanded. In all cases the Commissioner (Appeals) vide the common order upheld the confirmation.

Hence the present appeals.

4. As observed above, Notification No. 1/93 gave two options. The first option was taken by the assessees. In taking the option they were clearly wrong. Therefore for the duration covered by the proceedings, the department recovered the differential duty. At the same time however, the second option for clearance without payment of duty was also available. In that case the assessees themselves could seek refund of the duty paid by re-exercising their option and claiming the benefit of Part (II) of the said provisions.

5. The Tribunal in their judgement in the case of Jai Industries Vs.

Collector of Central Excise [1993 (68) ELT 475] was dealing with an issue arising out of the earlier notification No. 175/86. In that case the appellants had filed a declaration in order to take benefit of clause (i). They however, did not take any credit but cleared the goods at concessional rate of duty. Differential duty was demanded. The Tribunal observed that even if the declaration had been filed, it was not obligatory that they should have availed of the benefit of the modvat credit. Even if they had paid the duty at concessional rate quite wrongly, the alternate benefit available under clause (ii) would still be available to them.

6. Shri BK Choubey submits that at no time in the proceedings was the claim made by the present appellants for the alternate benefit. In the cited case also as the judgement read, we do not find specific claim made by the appellants. Where an alternate claim was available and where the department chose to close their eyes to the availability but insisted on making the assessees paid at the higher rate the Tribunal would be justified and entitled to go into the alternate benefit available to the assessee. The ratio of the judgement in the case of Jai Industries was adopted by the three three Member Bench judgement in the case of Amar Machine Tools (P) Ltd. Vs. Collector of Central Excise [1995 (80) ELT 595 (Tribunal)].

7. It is not that the scheme did not permit the assessees to opt of one option and seek the other. This has been brought out in the case of Natraj Paints Pvt. Ltd. Vs. Collector of Central Excise, [1994 (74) ELT 344 (Tribunal)] as well as K.F. Beltings Pvt. Ltd. Vs. Collector of Central Excise [1994 (72) ELT 891 (Tribunal)].

8. We thus find that where the alternate beneficial avenue was open to the assessees, the order of the Commissioner following only one option was not sustainable. This bunch of appeal is allowed. The matters are remanded back to the jurisdictional Commissioner (Appeals). He will grant another opportunity to the appellant to be heard and then proceed to decide the issue afresh, in terms of our observations above.