TaxTMI 
TaxTMI 
1989 (4) TMI 159
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....of the Central Excises and Salt Act, 1944 (hereinafter referred to as the Act) proposing to set aside the Order-in-appeal No. 1546/Cal/81 dated 12.11.81 passed by the Appellate Collector of Central Excise, Calcutta. 2. The facts of the case, in brief, are that the respondents were engaged in manufacture of Organic Surface Active Agents falling under Item No. 15AA of the First Schedule (hereinafter referred to as the Schedule) to the Act, utilising a substance called Photine C falling under Item No. 14DD of the Schedule as raw material. The respondents were permitted to avail themselves of the facility of proforma credit under Rule 56A of the Central Excise Rules, 1944 (hereinafter referred to as the Rules) while utilising the said raw ma....
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....the Appellate Collector, Central Excise, Calcutta, is not legal, proper and correct inasmuch as the Assistant Collector has correctly refused the permission to allow credit to the said Company in respect of Auxiliary duty for payment of Basic Excise duty on the finished products. The Government of India, further, tentatively are of the view that in accordance with the Notification No. 58/74-C.E., dated 1.3.74, Auxiliary duty on the raw material was to be adjusted against the auxiliary duty of the finished goods and accordingly, since the said company did not have to pay any Auxiliary duty on the said finished goods, they were not prima facie entitled to take credit of the Auxiliary duty paid on the raw materials. The Government of India, fu....
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....s if it were an appeal filed before the Tribunal. 3. We have heard Shri A.S. Sunder Rajan, DR, for the Appellant-Collector and Shri S.K. Beri, Advocate, for the respondents. 4. The undisputed position is that auxiliary duty had been paid on the raw material but, at the material time, auxiliary duty was not leviable on the finished products, they having been exempted from auxiliary duty by a notification issued under Rule 8(1). The present claim has to be examined with reference to two notifications. The first one, namely, Notification No. 58/74, dated 1.3.74 issued under Rule 8(1), read with sub-clause (5) of clause 22 of the Finance Bill, 1974, exempted excisable goods specified in Notification No. 54/74, dated 1.3.74, and in respect....
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.... 1944, in sub-rule (3), in clause (via) after sub-clause (b), the following sub-clause shall be inserted, namely : "(c) The credit of auxiliary duties of excise allowed in respect of any material or component parts and lying unutilised immediately before the commencement of the Central Excise (Amendment) Rules, 1978 in the account of the manufacturer as a result of discontinuance of the said duties of excise under the Finance (No. 2) Act, 1977 (29 of 1977), may be utilised after such commencement towards payment of duty on any finished excisable goods for the manufacture of which such material or component parts were permitted to be brought into the factory under sub-rule (2)." With respect to this notification, the contention of the ....
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....7 of the Act. 7. We have carefully considered the submissions before us. Having persued the judgment of the Supreme Court in the Modi Rubber Ltd. case which was on the construction of notifications issued under Rule 8(1), we are of the opinion that it is not applicable to the facts of the present case. But, as the Supreme Court has observed in Para 3 on Page 853 of the report, the word "duty", for the purpose of the rules, is defined in Clause (v) of Rule 2 to mean "the duty payable under Section 3 of the Act". That is to say, the duty leviable under the First Schedule to the Act. In other words, basic excise duty. Notification No. 4/78 (extracted earlier) is not an exemption notification under Rule 8(1). The notification permits the uti....