Collector of Central Excise Vs. thermopack Industries - Court Judgment

Excerpt:
1. these are two appeals filed by the revenue being aggrieved by a common order-in-appeal dated 27-2-92 passed by the collector of central excise (appeals), new delhi. as in both the appeals common issue is for consideration they were heard together and are being disposed of by this common order.2. the respondents in one case m/s. singh plastic and in another case m/s. thermopack industries were engaged in the manufacture of article of plastics which were classifiable under chapter heading nos. 39.23, 39.24 and 39.26 of the tariff. against sl. no. 39 of the table annexed to notification no. 53/88-c.e., dated 1-3-88 all goods other than of polyurethanes classifiable under the above headings were exempted from duty subject to certain conditions. against sl. no. 40 the applicable rate of duty was 15% ad volarem and the exemption was unconditional.the respondents paid duty as applicable under sl. no. 40 and availed of the modvat credit in respect of the inputs used in the manufacture of such goods. the collector of central excise (appeals) had taken a view that the modvat credit in such circumstances was admissible. the revenue had contended that when the goods were covered under sl. no. 39 of the aforesaid table, it was not for the manufacturer to pay duty against sl. no. 40 of the said table.3. we have heard shri h.k. jain, sdr for the revenue. shri t.vishwanathan, advocate is present for m/s. thermopak industries. no one is present for m/s. singh plastic.4. we have gone through the exemption notification no. 53/88-c.e., dated 1-3-88 as amended. we find that the exemption against sl. no. 39 of the table aforesaid was a conditional exemption. in case the conditions are not satisfied then the goods were to be assessed to duty against sl. no. 40. it could not be argued by the revenue that the manufacturer should avail of the benefit of nil rate of duty against sl. no. 39 when the goods were equally classifiable under sl. no. 40.the ld. advocate had referred to a number of decisions of this tribunal to the effect that when there are two exemption notifications equally applicable to a manufacture, it is his option as which of the exemption notification he avails of. in this case we find that the sl. nos. 39 and 40 are not similarly worded and we consider that it was the option of the assessees to pay the duty and not avail the full exemption which in any case was subject to the condition as given in column 5 of the table annexed to the exemption notification.5. the collector of central excise (appeals) had observed that in the facts and circumstances of the case the benefit of sl. no. 40 could not be denied to the manufacturers. we do not find any infirmity in the view taken by the collector of central excise (appeals). as a result there is no merit in both these appeals filed by the revenue and the same are rejected. ordered accordingly.

Judgment:
1. These are two appeals filed by the Revenue being aggrieved by a common order-in-appeal dated 27-2-92 passed by the Collector of Central Excise (Appeals), New Delhi. As in both the appeals common issue is for consideration they were heard together and are being disposed of by this common order.

2. The respondents in one case M/s. Singh Plastic and in another case M/s. Thermopack Industries were engaged in the manufacture of article of plastics which were classifiable under Chapter Heading Nos. 39.23, 39.24 and 39.26 of the Tariff. Against Sl. No. 39 of the Table annexed to Notification No. 53/88-C.E., dated 1-3-88 all goods other than of polyurethanes classifiable under the above headings were exempted from duty subject to certain conditions. Against Sl. No. 40 the applicable rate of duty was 15% ad volarem and the exemption was unconditional.

The respondents paid duty as applicable under Sl. No. 40 and availed of the Modvat credit in respect of the inputs used in the manufacture of such goods. The Collector of Central Excise (Appeals) had taken a view that the Modvat credit in such circumstances was admissible. The Revenue had contended that when the goods were covered under Sl. No. 39 of the aforesaid Table, it was not for the manufacturer to pay duty against Sl. No. 40 of the said Table.

3. We have heard Shri H.K. Jain, SDR for the Revenue. Shri T.Vishwanathan, Advocate is present for M/s. Thermopak Industries. No one is present for M/s. Singh Plastic.

4. We have gone through the exemption Notification No. 53/88-C.E., dated 1-3-88 as amended. We find that the exemption against Sl. No. 39 of the Table aforesaid was a conditional exemption. In case the conditions are not satisfied then the goods were to be assessed to duty against Sl. No. 40. It could not be argued by the Revenue that the manufacturer should avail of the benefit of nil rate of duty against Sl. No. 39 when the goods were equally classifiable under Sl. No. 40.

The ld. Advocate had referred to a number of decisions of this Tribunal to the effect that when there are two exemption notifications equally applicable to a manufacture, it is his option as which of the exemption notification he avails of. In this case we find that the Sl. Nos. 39 and 40 are not similarly worded and we consider that it was the option of the assessees to pay the duty and not avail the full exemption which in any case was subject to the condition as given in Column 5 of the Table annexed to the exemption notification.

5. The Collector of Central Excise (Appeals) had observed that in the facts and circumstances of the case the benefit of Sl. No. 40 could not be denied to the manufacturers. We do not find any infirmity in the view taken by the Collector of Central Excise (Appeals). As a result there is no merit in both these appeals filed by the Revenue and the same are rejected. Ordered accordingly.