M. Santhanam, Member (J)

1. The revision application filed before the Government of India, on transfer to the Tribunal is being treated as an appeal.

2. The appellants are manufacturers of Chromium Plating Sanitary Bath Room Fittings. The value of the goods cleared by them during the years 1 976-77 and 1 977-78 is as under :-

xxx xxx xxx xxx xxx

The appellants were holding L-4 Licence under Tariff Item 68 and were working under the exemption limit of Rs. 15,00,000/- under Notification 89/79-CE, dated 1.3.1979. After 18.6.1977 to 12.4.1979, they did not obtain any Central Excise Licence. Since the appellants had cleared goods from 18.6.1977 to 31.3.1979 without obtaining Central Excise Licence and without payment of Central Excise duty, they were called upon to show cause as to why the Central Excise Duty of Rs. 1,94,053/- should not be demanded from them. In their reply to the show cause notice, the appellants inter alia contended after excluding export's value of Rs. 7,87,686.18 and Rs. 1,36,599.50 during the years 1976-77 and 1977-78 respectively, their total clearances during any of the 3 years did not exceed the limit of Rs. 30,00,000/- prescribed under Notification 176/77, dated 18.6.1977. Other contentions were also raised which are not relevant at this stage. The Collector held that the plea raised by the appellants was not established and as the appellants did not have a licence, the demand for duty was justified. He also imposed a penalty of Rs. 1,00,000/-.

3. The appellants filed an appeal before the Central Board of Excise & Customs challenging the decision. Before the Board the appellants conceded that they were liable to pay duty on all their clearances during the period 18.6.1977 to the end of Financial Year 1978-79. They pleaded that in their ignorance of the new criterion they continued to avail the exemption which was admissible to them prior to 18.6.1977. The Board confirmed the demand for duty as the clearances exceeded Rs. 30,00,000/-, during the Financial Years 1976-77 and 1977-78. The penalty was, however, reduced to Rs. l0,000/-.

4. Shri A.K.S. Bedi, learned Advocate submitted that the element of duty payable should have been deducted while computing the value of the clearances. According to him, the term "value" under Section 4(4)(d) will not include of duty of excise payable on such goods. If the duty payable is reduced, then the value of clearances would not have exceeded the exemption limit. There would have been no violation attacking the penalty either. Shri Bedi argued that the word used was "payable" and not "actually paid". Even though the appellants have not paid the excise duty. It was urged that the duty payable should be reduced in computing the value of the clearances. There was no intention to evade payment of duty and the imposition of penalty was justified.

5. Shri H.L. Verma argued that the appellants have not paid the excise duty and in 1979 (4) E.L.T. (J464) (Bata Shoe Co. Pvt. Limited v. Collector of Central Excise, Calcutta and Ors.), the Calcutta High Court in paragraph 21 has observed as follows :-

"Under Rule 8 of the Central Excise Rules, exemption is granted in respect of excisable goods from the whole or any part of duty leviable on such goods. That means that the goods should be both "exciseable goods" and be "leviable" with the duty. Therefore, the "value" for purposes of exemption from duty is the real actual value after the duty has been paid and calculated and not the deemed value of Section 4 of the Act" for the purposes of duty".

It is not the cum-duty price and the party cannot be given the relief without duty had not been paid.

6. The points for consideration in the appeal are :-