COMMISSIONER OF CENTRAL EXCISE Vs. GINNI FILAMENTS LTD.

JUDGEMENT

(1.) In these appeals, filed by the Revenue, the issue involved is whether the Additional Duty of Excise under the Additional Duties of Excise (Textiles and Textile Articles) Act is leviable on the goods cleared from a 100% Export Oriented Undertaking to the Domestic Tariff Area or the Additional Duty of Excise is exempted under Notification No. 55/91 -C.E., dated 25 -7 -91.

(2.) Shri Atul Dikshit, learned SDR, submitted that M/s. Ginni Filaments Ltd., a 100% E.O.U., manufacture Cotton Yarn and P.V. Synthetic Yarn; that a show cause notice was issued to them for demanding Additional Duty of Excise in respect of clearances effected by them during the month of March, 2000; that the Dy. Commissioner of Central Excise under the Adjudication Order No. 169/2000, dated 10 -8 -2000 confirmed the demand denying the benefit of Notification No. 55/91 -C.E.; that however, the Commissioner (Appeals) under the impugned order allowed the appeal filed by the Respondents relying upon the decision in the case of CCE, Indore v. Maiklal Fibres Ltd., 2001 (127) E.L.T. 589 (Tri.) and Century Yarn v. CCE, Bhopal, 2001 (133) E.L.T. 93 (Tri.), and Board's Circular No. 384/17/98 -CX., dated 20 -3 -98. The learned SDR submitted that Notification No. 8/97 -C.E., dated 1 -3 -97 as amended by Notification No. 11/2000 -CE., dated 1 -3 -2000 exempted goods manufactured in 100% E.O.U. and allowed to be sold in India from so much of duty as is in excess of an amount equal to the aggregate of the duty of excise leviable under Section 3 of the Central Excise Act or under any other law for the time being in force on like goods, produced or manufactured in India; that it is, thus, clear from the Notification No. 8/97 as amended w.e.f. 1 -3 -2000 that additional excise duty was also to be paid in addition to the basic excise duty in respect of Yarn sold by the Respondents in the Domestic Tariff Area; that this was also clarified by the Board under Circular No. 554/50/2000 -CX., dt. 19 -10 -2000. The learned D.R. finally relied upon the decision of the Punjab and Haryana High Court in the case of Vardhman Polytex Ltd. v. U.O.I. - 2001 (135) E.L.T. 17 (P and H) wherein the Hon'ble High Court considered the effect of Notification No. 8/97 -C.E. as amended by Notification No. 11/2000 -CE. and held that the object of amendment appears to be to bring a parity between 100% E.O.Us, and other manufacturers in the matter of payment of duties in respect of goods manufactured and allowed to be sold in India. The Punjab and Haryana High Court also held that the expression "Any other Law for the time being in force" used in Notification No. 11/2000 -C.E. is of wide amplitude, and therefore, it would take within its fold the 1978 Act and the logical consequence and issuance of notification dated 1 -3 -2000 is that the petitioners are liable to pay Basic Excise duty along with Additional Excise duty in respect of clearances made to D.T.A. The learned SDR, further, mentioned that the Appellate Tribunal in the case of Parasrampuria International v. CCE, Indore, vide Final Order No. 184/2002, dated 17 -7 -2002 [2003 (152) E.L.T. 142 (Tribunal)] has denied the benefit of Notification No. 55/91 to the Appellants therein following the judgment of the Punjab and Haryana High Court.

(3.) On the other hand Shri M. Chander Shekher, learned Sr. Advocate, submitted that the Ministry of Finance under Circular No. 384/17/98 -CX., dated 20 -3 -98 has clarified that Notification No. 55/91 exempts excisable goods produced or manufactured in a 100% EOU from the whole of the duty of excise leviable under Section 3 of the Additional Duty of Excise (Textiles and Textile Articles) Act, 1978; that the Ministry, further, clarified that the as -sessee who is claiming the benefit of the Notification No. 8/97 -C.E., dated 1 -3 -97 will be eligible to claim benefit under Notification No. 55/91 -C.E. and the same should not be denied to them; that in March, 2000 when the goods were cleared by the Respondents this Circular of the Ministry of Finance was in existence, and therefore, the Revenue cannot make any claim contrary to the clarification given under the Circular, that another Circular No. 554/50/2000 -CX., dated 19 -10 -2000 was issued much after the material period involved in the present appeal and that Circular will be effective from the date of issue and not in respect of clearances effected prior to its issuance. The learned Sr. Counsel, further, submitted that it has been held by the Supreme Court in the case of H.M. Bags Manufacturer v. CCE, 1997 (94) E.L.T. 3 (S.C.) that any order under Section 37B of the Central Excise Act is effective from the date of its publication and the date for raising the demand by the Revenue cannot be any date prior to its publication. He also relied upon the decision of the Supreme Court in the case of CCE v. Dhiren Chemical Industries, 2002 (139) E.L.T. 3 (S.C.) wherein it has been held that regardless of the interpretation that has been placed by the Supreme Court, if there are circulars which have been issued by the Central Board of Excise & Customs which place a different interpretation, that interpretation will be binding on the Revenue. The learned Sr. Counsel also mentioned that the similar views were reiterated by the Supreme Court in the case of CCE v. Dhiren Chemical Industries, 2002 (143) E.L.T. 19 (S.C.). He, therefore, contended that as Circular dated 20 -3 -98 was still in existence in March, 2000 the Respondents are not liable to pay Additional Duty of Excise.