TaxTMI 
TaxTMI 
1996 (11) TMI 167
X X X X Extracts X X X X
X X X X Extracts X X X X
....drugs supplied to Government as per DGS&D rate contract and the other under part III for sale through normal channels at the prices fixed in the price list referred to in paragraph 19 of the Drugs (Prices Control) Order, 1979 (for short, the 1979 Order) issued under Section 3 of the Essential Commodities Act, 1955. Notification No. 245/83 dated 13-9-1983 granted exemption to manufacturers of Patent or Proprietary Medicines of so much of duty leviable on the medicines as is in excess of the duty calculated on the basis of value of medicines arrived at after allowing a discount of 15% on the retail price of the medicine specified in paragraph 19 of the 1979 Order. The condition in proviso (iii) of the notification is that the manufacturer sho....
X X X X Extracts X X X X
X X X X Extracts X X X X
....4 (for short, the Act) recognised different prices for different class of buyers. Assistant Collector overruled these contentions and confirmed the demand and his order was confirmed by the Collector (Appeals). Hence, the present appeal. 2. The main contention of the learned counsel of the appellant is that proviso (3) of the notification as interpreted by the lower authorities would be in conflict with proviso (i) of Section 4(1)(a) of the Act and that on a harmonious reading of the provisions of the statute and the notification, proviso 3 must be understood as permitting exemption to be claimed in respect of parti- cular class of buyers. On this basis, it is contended that the appellant's buyers fell into two classes, namely the G....
X X X X Extracts X X X X
X X X X Extracts X X X X
....be normal price in relation to such class of buyers. Proviso (iii) to the notification reads thus :- "(iii) the manufacturer claims exemption under this notification in respect of all the medicines cleared by him, the retail price of which is specified in the said price list." The proviso makes it clear if the manufacturer desires to claim the benefit of the exemption notification, he must claim exemption in respect of all medicines cleared by him, the retail price of which was specified in paragraph 19 of the 1979 Order. The notification is an exemption notification issued under Rule 8(1) of the Central Excise Rules, 1944, exempting Patent or Proprietary Medicines falling under Item 14E from so much of the duty of excise as is in exc....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... extent of relief. The method given in the notification is only to quantify the extent of reduced duty payable and the extent of duty relief. It does not prescribe method of valuation alternative to Section 4 of the Act. Therefore, the question of conflict being resolved by reading the two provisions harmoniously would not arise. 5. Once it is seen that the scope of the notification was only to grant limited exemption from payment of duty, it would follow that exemption cannot be forced on an unwilling manufacturer. The manufacturer is told that the Government would grant exemption to a particular extent provided he claims the exemption in respect of all medicines the retail price of which is specified in the said price list. Admitt....
X X X X Extracts X X X X
X X X X Extracts X X X X
....herwise on such medicines. It is clear that the Government was fully aware of this position. It was evidently the intention of the Government that the manufacturers of medicines who desire the benefit of exemption should forego benefits they may otherwise have and accept the standard pattern of duty povided in the notification. We would like to emphasise again that no manufacturer is compelled to avail the benefit of the exemption notification. It is a matter of choice and it is for him to exercise the choice on the basis of his own calculations. We, therefore, find no conflict as suggested by the appellant. 6. We are also not able to agree that proviso (iii) must be understood in such a manner as to permit a manufacturer not to cla....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s made to non-governmental buyers. In other words, instead of requiring the appellant to pay differential duty on supplies made to Government, the Department should have required the appellant to pay differential duty on supplies made to non-governmental buyers. But it is also to be seen that the basis of show cause notice was that the appellant was bound to claim the benefit of the notification in respect of all medicines cleared by him and not merely in respect of part of the medicines cleared. The manufacturer was all along aware of the stand taken by the Department. We, therefore, feel that in order to do justice between the parties, we should give proper direction which will relieve the appellant of the liability to pay differential du....