IMPORTANT POINT
The authorities functioning under the Central Excise Act are not to deprive an assessee of the benefit available to him in law with a view to augment the quantum of duty for the benefit of the Revenue.

Headnote:Central Excise Tariff Act, 1985-Chapter 29, sub-heading 2913.00-Notification No. 234/86, dated 3.4.1986 -Exemption granted to bulk drugs-Claim of-Appellant, a manufacturer of bulk drugs-Drugs manufactured by it classified under tariff item 68, exempted under Notification No. 234/82 dated 1.1.1982-Appellant filed classification lists categorizing bulk drugs under the new tariff-Rate of duty payable mentioned as 15%-Whether appellant was entitled to claim benefit of exemption notification No. 234/86-(Yes)-Denial of benefit of the notification to appellant was unfair.
       Held : The notification squarely applies to the appellant and indeed the benefit thereunder was extended from November 21, 1986 - the date of filing of amended list - instead of from March 3, 1986 and April 3, 1986 when classification lists were first filed. It is nobody s case that the appellant was not manufacturing bulk drugs during the relevant period. (Para 7)
       The bulk drugs manufactured by the appellant fell under tariff item 68 of the erstwhile Central Excise Tariff and the appellant was enjoying exemption under Notification No. 234/82. Tariff Item 68 of the old Act is, in terms, identical to sub-heading 2913.00 of the Schedule to the Act. As on the date of filing of the classification list, the earlier notification No. 234/82 was not operative. It was in all fairness that the appellant indicated the rate of duty payable @ 15% without indicating the exemption in view of the change in the system brought about by the Central Excise Tariff Act, 1985. The notification under the Act - No. 234/86 - which came to be issued on April 3, 1986, exempts bulk drugs classified under sub-heading 2913.00 and the classification lists were filed by the appellant before issuance of the notification. Further, having regard to the fact that the Act came into force on the 28th February, 1986, the Parliament passed the Central Duties of Excise (Retrospective Exemption) Act, 1986 which provides for a new tariff, nomenclature as also rates of duties of excise. (Paras 9 and 10)
       In view of the provisions of Section 2 of the said Act, quoted above, Notification No. 234 dated 3.4.1986 would relate back to March 1, 1986. Consequently, the appellant became entitled to the benefit of Notification No. 234/86 from March 1, 1986.
        (Para 11)

ORDER

The challenge in this appeal is to the correctness of the order of the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi in Appeal No. E/717/88-C, dated 26th April, 1993.

2. The point that arises for consideration is : whether the appellant is entitled to the benefit of Notification No. 234/86, dated April 3, 1986, granting exemption to bulk drugs falling under sub-heading 2913.00 of Chapter 29 of Schedule to the Central Excise Tariff Act 1985 from the date of filing of classification lists.

3. It would be relevant to refer to the facts giving rise to this appeal.

4. The appellant is a manufacturer of bulk drugs. The drugs manufactured by it were classified under tariff item 68 of the erstwhile Central Excise Tariff and they were exempt under Notification No. 234/82 dated 1.1.1982. With effect from 1.3.1986, the new classification was given effect to under the Central Excise Tariff Act, 1985 (for short the Act ). On March 3, 1986, under the Act the appellant filed classification lists categorizing the bulk drugs under the new tariff heading 30, having nil rate of duty. The Superintendent, Central Excise corrected the classification as falling under heading 2913.00 and pointed out that the bulk drugs were exempted. At that time, the rate of duty payable under heading 2913.00 was 15% and that was what the appellant had shown when it refiled the classification list. However, the appellant subsequently claimed the benefit of the said notification No. 234/86 dated 3.4.1986. To comply with the requirement of the said notification, the appellant applied for a certificate to the Drugs Controller of the Government of India. The said certificate was issued on 24.6.1986. The appellant submitted the said certificate to the concerned authorities. On the ground that the appellant was not eligible for exemption and the duty payable at the rate of 15% was not paid, the Assistant Collector, Central Excise, issued three show cause notices on 24.7.1986, 6.11.1986 and 6.1.1987 which relate to the periods 1.3.1986 to 2.4.1986, 11.4.1986 to 27.7.86 and 28.7.1986 to 20.11.1986 respectively. Rejecting the claim of the appellant for exemption under notification No. 234, dated 3.4.1986, the Assistant Collector confirmed that it was liable to pay duty at the rate of 15%. On appeal, the Commissioner (Appeals) upheld the order of the Assistant Collector. On further appeal, on April 26, 1993, the CEGAT confirmed the order of the Commissioner (Appeals) on the ground that the appellant did not claim the benefit of exemption at the time of filing the classification list so as to enable the Assistant Collector to fix a period for production of the certificate from the Drugs Controller of the Government of India to the effect that the drugs claimed for exemption were bulk drugs within the meaning of the explanation to the notification. It is that order of the CEGAT that is assailed in this appeal.

5. We heard the learned counsel for the parties.

There is no dispute that the bulk drugs manufactured by the appellant fall under Chapter 29 and are classifiable under sub-heading 2913.00. It is also not in dispute that the rate of excise duty payable against such goods is 15%. It is admitted that on 3.4.1986, Notification No. 234/86 was issued by the Central Government granting exemption to bulk drugs classified under Chapters 28 and 29. It would be useful to read the notification here :

"In exercise of the powers conferred by sub-rule (1) of rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts bulk drugs, falling under Chapter 28 or Chapter 29 of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), from the whole of the duty of excise leviable thereon under section 3 of the Central Excises and Salt Act, 1944 :

Provided that the manufacturer furnishes to the proper officer, a certificate from the Drugs Controller to the Government of India, within such period as the said officer may allow, to the effect that the

Click Here to Read the rest of this document

2002 Supreme(SC) 869

IMPORTANT POINTThe authorities functioning under the Central Excise Act are not to deprive an assessee of the benefit available to him in law with a view to augment the quantum of duty for the benefit of the Revenue.

IMPORTANT POINT
The authorities functioning under the Central Excise Act are not to deprive an assessee of the benefit available to him in law with a view to augment the quantum of duty for the benefit of the Revenue.