INDOSWE ENGINEERS PRIVATE LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) These are the questions which have been raised in the present Petition.

(2.) The Petitioner is a manufacturer of aluminium extrude articles from crude aluminium scrap of different description The aforesaid crude aluminium and scrap form the raw material to be used in the aforesaid manufacturing process. The Petitioner had piad the requisite duty ;on the crude aluminium which was used in the manufacture of the final product. it was however given proforma credit of the said duty under the Notification under Rule 56-A . On the final product manufactured, the Petitioner claimed and the Department granted a reduction in duty under Notification No.46/70. This pertained to the period 2nd January, 1970 to 19h October, 1971,. The Office of the superintendent, Central Excise, by it show Cause Notices dated 1st/2nd January, 1971, 2nd January, 1971 and 30th November, 1971 raised a demand in the sum of Rs. 46,489.20, Rs.1,66,850.80 and Rs.11,66,999.84 respectively. According to the Department, the Petitioner was not entitled to claim benefit of both the Notifications and the duty had been shortly levied. Hence the amounts mentioned in the Show Cause Notices were payable by the Petitioner to the Department. The Petitioner by its replies dated the 9th March, 1971 and 28th December, 1971 inter alia contended that was no bar from claiming benefit under both the Notifications. The Petitioner's product complied with the requirements of th Notification No.46/70 as the raw material qualified the requirement of being duty paid at the time of assessment and, therefore, the Petitioner was eligible for reduction in duty as per the aid Notification. It was contended that the grant of a proforma credit did not make the raw material non-duty paid, so as to dis- entitle the Petitioner for being eligible for reduction in duty. The aforesaid contentions did not find favour with the Assistant a Collector of Central Excise and he by his three separate orders confirmed the demands contained in the show cause notices. The Assistant collector was of the view that the Petitioner had availed of proforma credit of duty on raw material and hence was not entitled to the benefit of Notification No. 46/70, i.e., use of duty paid raw material was not fulfilled and, therefore, the Petitioner was not entitled to the benefit of the said Notification. Aggrieved by the said orders, the Petitioner preferred three appeals to the Appellate Collector of Central Excise who,by his common order dated he January, 1975, confirmed the order of the Assistant collector and dismissed the appeals. Against the said order the Petitioner preferred a Revision Application to the Government of India, Respondent No. 1, and Respondent Nos. 2 and 3 by their order dated the 25th of February, 1978 dismissed the said Revision Application. Aggrieved by the aforesaid orders, the Petitioner has approached this Court by filing the present Petition.

(3.) Shri Patel, the learned advocate appearing in support of the Petition, submitted that show Cause Notices were issued only on the ground that the Petitioner is not entitled to both the benefits. He pointed out that even as per the order of the Assistant Collector dated 20th September, 1971 its was found that neither of the Notifications contained any prhobitory clause to the effect that if the advantage under one of them was availed;of, no advantage under the other would be available. Therefore, there is no dispute as to the Petitioners, entitlement to he concession under Notification No, 46/70subject of course to the fulfilment of the conditions/requirements of there respective the ground that the Petitioner had availed of the proforma credit of the duty that was paid on the aluminium ingots used in the further manufacture of aluminium articles. The Petitioner was, therefore, to entitled to the concessional rate of duty under notification No. 46/70 on the ground that the Petition had availed of the Proforma credit in respect of the duty that was pad n the raw material (ingots). In effect, it meant that at the time of using such raw material after availing of the proforma credit. the Same be come non-duty paid. By using such non- duty paid raw material in he further manufacture of aluminium articles, the Petitioner did not fulfill the aforesaid condition stipulated in the Notification No.46/70. consequently , the Petitioner was not eligible to the concessional rate of duty under that Notification. Had he Petitioner not availed o the proforma credit in respect of the duty that was paid on the ingots, it could have definitely been eligible for the concessional rate of duty under Notification No. 46/70. It is this latter part of the reasoning of the Assistant Collector which found favour with the appellate and the Revisional authorities that was seriously assailed by Shri Patel in the present proceedings. According to Shri Patel the Petitioner has paid the requiste duty on the raw material used in the manufacture of its final products. All that the Petitioner had been granted was the proforma credit tin respect of that duty. this was done not bay refunding to the Petitioner the duty that was paid but by making the necessary entries in regard to the proforma credit. The Petitioner was entitled to the benefit of the said proforma credit;only at the stage if clearing if its final products and this was in terms of the Notification under Rule 56-A . This did not render the raw material as non-duty paid. According to Shri Patel there is no provision in the Excise Act which makes a product non-duty paid once it is cleared on payment of duty which ought to have been paid at the time of clearance. Non -duty paid goods are only those which have been cleared clandestinely.