Judgment

CHINNAPPA REDDY, J. :- This appeal is directed against a judgment of the Customs. Excise and Gold Control Appellate Tribunal in regard to the manner and sequence in which certain notifications under Rule 8 sub-rule (1) of the Central Excise Rules granting exemptions from duty have to be worked out. By a notification dated August 1, 1974 the Central Government, in exercise of its powers under sub-rule (1) of Rule 8 of the Central Excise Rules, exempted,

"Tyres for motor vehicles falling under sub-item (1) of Item No. 16 of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944) from so much of the duty of excise leviable thereon as is in excess of fifty-five per cent ad valorem."

Thereafter on June 16, 1977, another notification was issued in the following terms :

"In exercise of the powers conferred by sub-rule (1) of Rule 8 of the Central Excise Rules, 1944 the Central Government hereby exempts all excisable goods (hereinafter referred to as the "said goods") on which the duty of excise is leviable and in the manufacture of which any goods falling under Item No. 68 of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944) (hereinafter referred to as the inputs) have been used, from so much of the duty of excise leviable thereon as is equivalent to the duty of excise already paid on the inputs. Notification No. 205/77 dated 28-9-77, subject to the conditions that the manufacturer furnishes to the proper Officer a statement showing the quantity of the inputs used in the manufacture of every unit of the said goods :

Provided that where the duty of excise leviable on the said goods is less than the amount of duty of excise paid on the inputs, the extent of exemption shall be restricted to the duty of excise on the said goods."

A further notification was issued on July 14, 1978 and this was in the following terms :

"In exercise of the powers conferred by sub-rule (1) of rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts tyres and tubes, excluding flaps falling under Item No. 18(1) and 18(3) of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944) (hereinafter referred to as the specified goods) from so much of the duty of excise leviable thereon (read with any relevant notification issued under the said sub-rule (1) of rule 8 and in force for the time being) as is in excess of

(a) eighty-seven and a half per cent of such duty, if produced in any factory which commenced production of the specified goods for the first time earlier than the 1st day of April 1976 : and

(b) seventy-five per cent of such duty, if produced in any factory which commenced production of the specified goods for the first time on or after the 1st day of April, 1976,

subject to the conditions that

xxxxxX.

2. There is no controversy regarding evaluation. According to the assessee as well as the department effect has first to be given to the notification dated August 1, 1974 and the duty calculated in terms of that notification. There is also no controversy at this stage. The controversy begins thereafter. According to the department, thereafter, effect has to be given first to the notification dated June 16, 1977 and then to the notification dated July 14, 1978 whereas according to the assessee effect has to be given, in the first instance, to the notification dated July 14, 1978 and then to the notification dated June 16, 1977. The Departments contention was accepted by the Tribunal. In this appeal, Dr. L. M. Singhvi, learned counsel for the appellant argued that on principle the effective duty has to be first determined by applying the notification dated July 14, 1978 first and the duty paid on the inputs should be set off under the notification dated June 16, 1977 against the duty determined as payable after applying the notification dated July 14, 1978. In support of his argument, the learned counsel relied upon a recent judgment of this court in Asst. Collector of Central Exc