1984 (6) TMI 225

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....sented before the Tribunal. 2. The appellants M/s. Southern Petrochemical Industries Corporation Limited, Madras, are the manufacturers of various type of fertilsers. The Government of India by Notification No. 198/76-C.E., dated 16-6-1976 announced a scheme of excise relief to encourage higher production to the extent of 25% duty on the goods cleared in excess of base clearance. As per the notification, the base clearance worked out to 46501.083 MT which was approved by the Assistant Collector, Excise, Tirunelveli. The appellants started availing of the 25% relief w.e.f. 14-8-1976 after clearing the base clearance allowed, as per Notification No. 198/76. 3. Superintendent of Central Excise, Tuticorin, served the appellants ....

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....drawing a part of the rebate to which the appellants were entitled, only on the plea that the benefit was not given to the consumers. According to the learned Counsel of the appellants, the purpose of granting relief is to encourage higher production and if the relief is passed on to the consumers, it cannot be considered as an incentive for higher production. It has also been argued that in this case the assessable value has been fixed by the Agriculture Ministry, Government of India, and assessment is to be done as per Section 4(1) (a) (ii) of the Central Excises and Salt Act, 1944. If the assessable value is to be recalculated, it will be higher than the assessable value fixed by the Agriculture Ministry under Fertiliser Control Order. O....

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....paid only 75% to the Government retaining the remaining 25% of the duty, naturally the 25% retained by the appellants will go to increase the assessable value. Our attention was also drawn towards the Trade Notice No. 2/78 (1/Genl/78), dated 24-1-1978 of the Collector of Central Excise, Madurai in this regard. According to the SDR the authority below is correct in demanding the differential duty on account of taking into consideration the 25% of the duty retained by the appellants. Our attention has also been drawn that after the decisions of various High Courts on this aspect, in the year 1982, the Central Excise Act was amended by Clause 47 of Finance Bill, 1982 retrospectively from 1-10-1975 and as per this amendment the matter stands re....

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....ence to the rate specified in such Act in respect of such goods as reduced so as to give full and complete effect to such exemption ; and (ii) in any other case, the duty of excise computed with reference to the rate specified in such Act in respect of such goods." 11. It is clear from this that the amount of money that can be taken as duty under the Central Excises and Salt Act, is the effective duty of excise only; and that the effective duty is the duty resulting under the Act and from an exemption, if any, under the Act having been given effect to, if the exemption is not one which arises from credit or reduction being given for duty paid on raw materials used in the manufacture of the finished goods. 12. The Finance ....