1984 (2) TMI 340 - AT - Central Excise

Tribunal allows appeal on fare meter valuation, grants consequential relief.

RC. EDWARDS & CO. PVT. LTD., BOMBAY Versus COLLECTOR OF CENTRAL EXCISE, BOMBAY

The Tribunal allowed the appeal in respect of 505 fare meters, holding that their value should be deducted in arriving at the value of clearance for home ... - Issues Involved:1. Whether the 528 fare meters exported to Ceylon should be included within the clearance made for home consumption for availing exemption under Notification No. 89/79-C.E.2. The interpretation and applicability of Notification No. 89/79-C.E. and Notification No. 105/80-C.E.3. The legality and correctness of the Review Notice and order by the Collector of Central Excise.4. Whether the exported fare meters were meant for home consumption.5. The relevance of the Tribunal's decision in International Minelmech v. Collector of Central Excise, Meerut.6. The treatment of fare meters as components or accessories of auto-rickshaws.7. The procedural compliance with Rules 12 and 13 of the Central Excise Rules for export of excisable goods.Issue-wise Detailed Analysis:1. Inclusion of 528 Fare Meters in Home Consumption Clearance:The primary issue was whether the 528 fare meters exported to Ceylon should be included within the clearance made for home consumption for availing exemption under Notification No. 89/79-C.E. The appellants argued that the fare meters were not meant for home consumption and were specifically designed for the Ceylonese market. The Tribunal found that the 5 meters exported directly by the appellants and 500 meters exported through Bajaj should not be included in the clearance for home consumption. However, 23 meters exported through API were included as the Bill of Lading indicated they were fitted to auto-rickshaws.2. Interpretation and Applicability of Notification No. 89/79-C.E. and Notification No. 105/80-C.E.:Notification No. 89/79-C.E. grants exemption to small-scale manufacturers whose total capital investment does not exceed Rs. 10,00,000, and the first clearance of goods up to Rs. 15 lakhs is exempt from duty. The Tribunal held that goods cleared for export and actually exported out of India cannot be considered as goods cleared for home consumption. The appellants were entitled to claim the benefit of exemption under this notification for the year 1979-80 as their clearances for the previous financial year did not exceed Rs. 30 lakhs.3. Legality and Correctness of the Review Notice and Order by the Collector of Central Excise:The Collector of Central Excise, acting under Section 35A of the Central Excises and Salt Act, 1944, reviewed the Assistant Collector's order and held that the value of 528 meters should be included for availing exemption under Notification No. 89/79-C.E. The Tribunal found that the Review Notice and order imported an impermissible limitation by stating that export goods had to be directly exported. The Tribunal concluded that the Collector's order was beyond jurisdiction and not supported by evidence.4. Whether the Exported Fare Meters Were Meant for Home Consumption:The appellants contended that the fare meters were not meant for home consumption as they were designed according to Ceylonese specifications. The Tribunal agreed with the appellants for the 505 meters (5 meters exported directly and 500 meters through Bajaj) and concluded that these meters were not for home consumption. However, for the 23 meters exported through API, the Tribunal found that they were fitted to auto-rickshaws and thus included them in the clearance for home consumption.5. Relevance of the Tribunal's Decision in International Minelmech v. Collector of Central Excise, Meerut:The appellants relied on the Tribunal's decision in International Minelmech, where it was held that goods cleared for export and actually exported cannot be considered as goods cleared for home consumption. The Tribunal found the facts of the present case substantially similar to International Minelmech and held that the value of 505 fare meters should not be included in the clearance for home consumption.6. Treatment of Fare Meters as Components or Accessories of Auto-Rickshaws:The Tribunal examined whether fare meters could be considered components or accessories of auto-rickshaws. It concluded that fare meters are neither components nor accessories of auto-rickshaws. The Tribunal also noted that the certificates from Bajaj and API established that the meters were not fitted to the auto-rickshaws, except for the 23 meters exported through API.7. Procedural Compliance with Rules 12 and 13 of the Central Excise Rules:The Department argued that the appellants should have followed Rules 12 and 13 for export of excisable goods. The Tribunal found that since the appellants had not paid duty, there was no question of claiming rebate under Rule 12. Rule 13 would have applied if the appellants were otherwise liable to payment of duty. The Tribunal concluded that the facts of the case did not require compliance with these rules as the goods were cleared under an exemption notification.Conclusion:The Tribunal allowed the appeal in respect of 505 fare meters, holding that their value should be deducted in arriving at the value of clearance for home consumption. The appeal was thus partly allowed, granting consequential relief to the appellants.