SUPERINTENDENT OF CENTRAL EXCISE Vs. TEXMACO LIMITED

JUDGEMENT

(1.) After hearing the learned counsel for the parties, it appears that the delay has been explained sufficiently. We, therefore, condone the delay. Let the appeal be registered. On the question of condonation of delay both the learned counsel for the parties had addressed the Court on the merits of the appeal. By consent of the parties, the appeal is treated as on day's list for hearing. We have heard the matter on the merit as well. Facts:

(2.) A show cause notice was issued to the respondent requiring levy of excise duty, as per classification under Heading 8607 of Central Excise Tariff Act, 1985, on the ground that the assessee was not entitled to obtain the benefit of two exemptions under Notification No. 217/86-CE dated 2nd November, 1986 which were mutually exclusive. This was challenged in a writ petition being C.O. No. 14170 (W) of 1991. The learned Single Judge by a decision dated 2nd December, 1991 was pleased to quash this notification on the ground that even assuming the allegations made in the show cause that there were two products, even then there was no justification of assuming that the assessee was availing the benefit of two notifications in respect of one product. Inasmuch as, if these are assumed to be two products in that event it would be entitled to exemption in respect ofinputs under Notification No. 452/86 and the end product is entitled to the benefit under Notification No. 217/86. The learned Judge had also found that the exemption under the said two notifications were granted in exercise of the power conferred under Rule 8(1) of the Central Excise Rules, 1944 whereas the case made out in the show cause notice was admitted to confuse the adjustment available under Rule 57A which is altogether distinct, separate and independent of each other. This decision of the learned Single Judge was reported in 1992 (59) ELT 522 (Cal.) (Texmaco Ltd. vs. Union of India). Submission on behalf of the appellant:

(3.) This appeal has since been preferred by the Superintendent of Central Excise against the said judgment. Mr. Jayanta Banerjee, learned counsel for the appellant points out that the 'Stabled Wagon' is different product which is manufactured in one of the units of the assessee capable of being marketed and treated as an end product subject to excise duty as an input which is captively used when mounted on the bogies for production of the complete wagon. These two independent products are chargeable to excise duty. The assessee is obtaining relief under the Notification No. 217/86 on the stabled wagon and then the benefit under notification No. 452/86 on the finished product. Thus the assessee was availing the benefit of two notifications by seeking adjustment, which is otherwise not available in view of the proviso to Notification No. 452/ 86 on the strength of Rule 57A. He contended that the assessee is entitled only to opt for one of the exemptions and not for both in respect of one product. He relied on the decision in Modi Xerox Ltd. vs. Collector of Central Excise, 1997 (94) ELT 139 (Tribunal) where the CEGAT North Bench, New Delhi had occasion to hold that the assessee could not avail of the benefit under Notification No. 217/86 and the Notification No. 53/88 and Notification No. 14/92. He also relied on the decision in Polychem Ltd. vs. Collector of Central Excise, Pune, 1997 (90) . ELT 156 (Tribunal) where the CEGAT, Old Special Bench 'C', New Delhi had held that the benefit under Notification No. 53/88 and Notification No. 217/85 could not be availed together. He has also drawn our attention to various other materials to support his contentions. Submission on behalf of the assessee/respondent: