G.T.C. INDUSTRIES LTD. Vs. CCE, VADODARA

JUDGEMENT

(1.) THE appellant is the manufacturer of machine rolled cigarettes falling under Tariff Heading 24.03 of the Central Excise Tariff Act. Vide Notification No. 355/86 -CE dated 24.6.1986 issued under Rule 8(i) of the Central Excise Rules, cigarettes were exempted from payment of duty leviable thereon under Central Excise and Salt Act, 1944 as is equivalent to the duty of excise already paid on cut tobacco used in the manufacture of cigarettes. The procedure prescribed through instructions issued by the Central Board of Excise and Customs to be followed in the case of set off Notifications was also made applicable to be followed for availing Exemption Notification vide F. No. 201/3/W/77 -CX. 6 dated 1.4.1981 which specifically provided that in the manufacture of finished goods, quantities of inputs used are more than the quantities actually contained in the finished products as there is generally an element of wastage, therefore, set off has to be allowed on duty paid on inputs including such wastages. The said instructions have been reiterated by the Board in letter F. No. 261/244/88 -CX. 8, dated 6.7.1990, with specific reference to the availment of set off in respect of duty paid on the quantity of cut tobacco used in the manufacture of machine -rolled cigarettes. The Central Excise authorities restricted the amount of set off of duty only to the extent of quantity of tobacco actually contained in the cigarettes. Set off which was relatable to waste of cut tobacco generated during the manufacture of cigarettes was not allowed. Therefore, the appellants filed periodical refund claims and all refund claims were filed within a period of six months except the refund claim for the initial period of April and May 1993 amounting to Rs. 2,122.20.

(2.) WE have heard Shri L.P. Asthana, learned Advocate and Shri M.M. Dube, learned DR.

(3.) OUR findings on the various issues are recorded hereunder: