RALLIS INDIA LTD Vs. COLLECTOR OF CENTRAL EXCISE

JUDGEMENT

(1.) THIS appeal arises out of and is directed against Order -in -Appeal No. A -2067/BII -242/82, dated 29 -11 -82 passed by the Collector of Central Excise (Bombay) by which he rejected the appellants' appeal preferred against the Order -in -Original No. V(28A) Demand -54/82/ 7730, dated 13 -7 -1982 passed by the Assistant Collector of Central Excise, Bombay Dn. V, by which he confirmed the demand of Rs. 23,138.37 and directed the appellants to pay the said amount forthwith.

(2.) THE facts necessary for the disposal of this appeal are few and simple. The appellants are the manufacturers of fans. They were permitted to avail proforma credit under Rule 56A of the Central Excise Rules, 1944 by the Assistant Collector of Central Excise on 9 -1 -1981 and they have utilised the credit of Central Excise duty paid on stampings and laminations amounting to Rs. 20,138.37 towards payment of duty on electric fans manufactured and cleared by them. By means of a letter dated 11 -6 -1981, the Assistant Collector informed the appellants not to avail proforma credit permitted earlier. Subsequently, Supdt. of Central Excise issued a show cause norice on 12th June, 1981 calling upon the appellants to show cause as to why Excise duty amounting to Rs. 23,138.37 should not be recovered from them under Section 11 of Central Excises and Salt Act, 1944, on the ground that the proforma credit in respect of electrical stampings and laminations used captively for the manufacture of Electric Fans was not admissible. The appellants in their reply contended, inter alia, that they have not contravened provisions of Rule 56A and therefore permission granted to them earlier cannot be withdrawn. They further contended that electric motors is an intermediate product which comes into being in the intermediary stage during the process of manufacture of electrical fans which is a notified product and therefore the motor assembly is exempted from duty in terms of Notification No. 28/69 as amended by notification 95/79. The Assistant Collector without assigning any reason rejected the contention of the appellants and confirmed the demand. Feeling aggrieved by the order, appellants preferred an appeal before the Collector (Appeals). The Collector (Appeals) found that the appellants have availed of total exemption in respect of electric motors during the relevant period and therefore the appellants are not eligible for proforma credit for the laminations and stampings which goes into the manufacture of motors. In support of his finding, the Collector (Appeals) relied upon the first proviso to Sub -rule (2) of Rule 56 A of the Central Excise Rules, 1944. In that view of the matter the Collector (Appeals), as stated earlier, rejected the appellants' appeal and hence this second appeal.

(3.) DURING the hearing of the appeal, Shri D.R. Kohli the learned Consultant who has been authorised by the appellants, urged the following grounds : -