Stock-based excise concession for yarn applied where goods were in inventory on the specified date

Notification No. 70/94-C.E. granted a concessional duty rate for texturised polyester filament yarn lying in stock with the manufacturer on 1-3-1994 and cleared up to 30-4-1994, provided Rule 56A credit had not been taken. Its operation depended on the existence of stock on the specified date, not on the precise date of clearance within the permitted period. The contrary view that goods cleared on 3-3-1994 were outside the notification was incorrect, and the concession was available for the stock in question.

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Issues: Whether Notification No. 70/94-C.E. dated 16-3-1994 applied to texturised polyester filament yarn lying in stock on 1-3-1994 but cleared on 3-3-1994, so as to restrict duty to Rs. 3 per kg. instead of the tariff rate.

Analysis: The notification granted a special dispensation for texturised polyester filament yarn lying in stock with the manufacturer on 1-3-1994 and cleared up to 30-4-1994, subject to the condition that credit under Rule 56A of the Central Excise Rules, 1944 had not been availed. The governing effect of the notification was not limited by the actual date of clearance within that permitted period, but by the existence of the stock on the specified date. The construction adopted by the lower appellate authority, which denied the benefit for goods cleared on 3-3-1994, was held to be incorrect.

Conclusion: The notification applied to the stock in question and the concessional rate was available; the view of the Commissioner (Appeals) was set aside and the order of the Assistant Collector was restored.

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