1999 (7) TMI 80 - HC - Central Excise

Tribunal affirms excise duty on woollen felt, rejects exemption plea, highlights total goods value for liability.

The Tribunal upheld the excise duty levy on woollen felt as an excisable item under Tariff Item No. 68, rejecting the petitioners' challenge and claim for ... Value of clearances - Computation of - Deductions Issues:Challenge against excise duty levy on woollen felt as excisable item under Tariff Item No. 68. Claim for exemption based on Notification No. 176/1977. Dispute over calculation of gross clearance by the petitioner-company. Contention regarding deductions from gross sale value. Examination of contentions by Assistant Collector and Appellate Collector. Appeal before Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi.Issue 1: Challenge against excise duty levy on woollen feltThe petitioners challenged the levy of excise duty on woollen felt as an excisable item under Tariff Item No. 68, claiming it did not fall under the term 'woollen fabric.' They sought exemptions under Notification No. 176/1977 for small scale units meeting specific criteria.Issue 2: Claim for exemption based on Notification No. 176/1977The petitioners claimed exemption from excise duty based on Notification No. 176/1977, which granted exemptions to small scale units meeting investment and clearance value thresholds. The dispute arose over the interpretation and application of the notification criteria by the authorities.Issue 3: Dispute over calculation of gross clearanceA discrepancy arose regarding the calculation of the petitioner-company's gross clearance for the relevant years, leading to a show cause notice being issued by the authorities. The petitioners contested the calculation, asserting their entitlement to exemption based on the actual figures of clearance.Issue 4: Contention regarding deductions from gross sale valueThe petitioners sought deductions from the gross sale value, including amounts related to pending documents with the bank, cash discounts, and bill discounts. The Assistant Collector examined these contentions, ultimately rejecting the deductions and determining the excise duty liability based on the total value of goods cleared.Issue 5: Examination of contentions by Assistant Collector and Appellate CollectorThe Assistant Collector and the Appellate Collector considered the petitioners' contentions regarding deductions from the gross sale value, analyzing the nature of discounts and their admissibility under the Central Excises and Salt Act. They concluded that the petitioners failed to substantiate the deductions claimed, leading to the assessment of excise duty liability.Issue 6: Appeal before Customs, Excise and Gold (Control) Appellate TribunalThe petitioners appealed the decisions of the Assistant Collector and the Appellate Collector before the Tribunal, reiterating their arguments for exemptions and deductions. The Tribunal affirmed the earlier orders, emphasizing that excise duty is levied on manufacture and upheld the authorities' findings on the petitioners' failure to prove the deductions claimed. The appeal was dismissed, and the writ petition was rejected without costs.