1987 (2) TMI 66 - SC - Central Excise

Court affirms Tribunal's ruling on Excise Duty notifications, clarifies priority rules

The Court upheld the Tribunal's decision on the application of notifications under Rule 8, sub-rule (1) of the Central Excise Rules, determining that the ... Whether effect has to be given first to the notification dated June 16, 1977 and then to the notification dated July 14, 1978? Held that:- The notification dated July 14, 1978, it is to be noticed, has super-added the words 'read with any relevant notification issued under the said sub-rule (1) of Rule 8 and in force for the time being.' These super-added words show conclusively that the notification dealing with exemption to the extent of the duty paid on the inputs, which was already in force, had to be given effect before giving effect to the notification dated July 14, 1978. View taken by Tribunal accepted - appeal dismissed. Issues:1. Interpretation of notifications under Rule 8, sub-rule (1) of the Central Excise Rules regarding exemptions from duty.2. Determination of the sequence in which notifications granting exemptions from duty should be applied.Analysis:The case involved an appeal against a judgment of the Customs, Excise and Gold (Control) Appellate Tribunal regarding the application of notifications under Rule 8, sub-rule (1) of the Central Excise Rules granting exemptions from duty. The notifications in question were issued on August 1, 1974, June 16, 1977, and July 14, 1978. The controversy arose over the sequence in which these notifications should be given effect. The department argued for applying the notifications dated June 16, 1977, and then July 14, 1978, while the assessee contended for the reverse order. The Tribunal accepted the department's view, leading to the appeal.The appellant argued that the duty should first be determined by applying the notification dated July 14, 1978, and then the duty paid on the inputs should be set off under the notification dated June 16, 1977. The appellant relied on a previous judgment of the Court to support this argument. However, the Court disagreed with this submission based on the language of the notifications. The notification dated July 14, 1978, specifically referred to giving effect to any relevant notification already in force under Rule 8, sub-rule (1) before applying its provisions. This interpretation was supported by the department's counsel, and the Court found no escape from this conclusion.The Court clarified that the previous judgment cited by the appellant was not relevant to the issue at hand, as it dealt with the assessable value determination, not the order of priority for applying duty exemption notifications. The Court also rejected the argument of potential double taxation raised by the appellant, stating that there is no general principle against double taxation in the levy of Excise Duty. Ultimately, the Court upheld the Tribunal's view that the notification dated July 14, 1978 should be applied after any relevant existing notifications, dismissing the appeal with costs.