1.The respondents M/s. Polyurethene Footwears (P) Ltd. are manufacturers of parts of Footwear falling under Item 36(2) CET. In their classification list effective from 2-9-1983 they claimed exemption, with reference to the above said parts of footwear, under Notification No. 268/67-C.E., dated 1-12-1967 as amended. Their claim was that they had paid additional duty of customs under Section 3 of the Customs Tariff Act (CTA) with reference to imports of raw-materials used by them in the manufacture of parts of footwear (i.e.) Polyol and Isocyanate, under Item 15-A CET and they were therefore entitled to benefit under the above said notification. This claim was rejected by the Assistant Collector under his order dated 29-12-1983. On appeal the said order was set aside by the Collector of Central Excise (Appeals) under his order dated 12-3-1985. It is against the said order that the Collector of Central Excise, Pune has filed the present appeal.
2. We have heard Shri K.C. Sachar for the Appellant Collector and Shri V. Lakshmikumaran, Advocate for the respondents.
3. Notification No. 268/67-C.E., dated 1-12-1967 as amended by Notification No. 182/76-C.E., dated 5-6-1976 reads as follows : "In exercise of the powers conferred by Sub-rule (I) of Rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts such of the footwear and parts thereof falling under Item No. 36 of the First Schedule to the Central Excises and Salt Act, 1944, as are made out of artificial or synthetic resins or plastic materials or both (which have already borne the appropriate duty under Item No. 15A of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944), from the whole of the duty of excise leviable thereon subject to the condition that the contents of artifical or synthetic resins or plastic materials or both used in the manufacture of a footwear or a part thereof shall not be less than fifty per cent of the total weight of such footwear or parts thereof." 4. The issue is whether the words "which have already borne the appropriate duty under Tariff Item No. 15-A" in the above notification would refer to payment of Central Excise Duty only under the said item or would cover payment of additional duty of Customs under Section 3 of the C.T.A., the quantum thereof being as under Item 15-A CET.5. There is no dispute that the additional duty of Customs was paid treating the product to fall under Item No. 15-A CET. The case for the department is that it was only on and after issue of Notification No.70/85-C.E., dated 17-3-1985 that payment of additional duty of customs also entitled benefit being claimed in respect of such payment for exemption. The said notification read as follows : "In exercise of the powers conferred by Sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts footwear and parts thereof, falling under Item No. 36 of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944), from the whole of the duty of excise leviable thereon under Section 3 of the said Act, subject to the condition that the contents of artificial or synthetic resins or plastic materials or both falling under Item No. 15-A of the said First Schedule, and used in the manufacture of such footwear and parts thereof are not less than 50%, of the total weight of such footwear or parts thereof: Provided that appropriate duty of excise under the said Act or, as the case may be, the additional duty leviable under Section 3 of the Customs Tariff Act, 1975 (51 of 1975) has been paid on such artificial or synthetic resins or plastic materials." 6. On the other hand the contention for the respondents is that in view of the words used in Notification No. 268/67-C.E., the benefit of exemption was available whether the appropriate duty under Item 15-A CET had been paid as excise duty or as additional duty of Customs.
7. The Notification has been extracted in full earlier. The operative words (so far as the present dispute is concerned) are "which have already borne appropriate duty under Item 15-A of the First Schedule to the Central Excises and Salt Act". The argument of the appellants is that these words would include payment of additional duty of customs, such duty being quantified under Item 15-A CET. But it may be noted that benefit is being claimed (in terms of the final product) under a notification issued under Rule 8 of the Central Excise Rules. Rule 2(v) CER reads that duty means the duty payable under Section 3 of the Central Excises and Salt Act. Therefore, any reference to duty, in notifications issued under Rule 8 of the Central Excise Rules also, would have to have the same meaning. If so, the payment of duty under Item 15-A CET, as referred to in the notification, would have to be Central Excise Duty only. In this connection we may refer to the decision of this Tribunal in the case of United Metal Industries [1985 (28) E.L.T. 404)]. The above view, that the reference to payment of duty in notifications issued under Rule 8 of the Central Excise Rules would be reference to payments of Central Excise duty only and not the equivalent additional duty of customs was upheld in that decision. We are in respectful agreement with the said decision. In that view we hold that the payment of additional duty of customs under Item 15-A CET in the present instance would not entitle the appellants. In view of the finding in para 7 the order appealed against should have been set aside and consequently appealed by Revenue should have been allowed - Editor. to claim benefit under Notification 268 of 1967.
8. We accordingly uphold the impugned order and dismiss this appeal Ii should be "respodent appeal is from the Departdment - Editor.