V.T. Raghavachari, Member (J)

1. The appellants M/s. Tata Oil Mills Co. Ltd. received notice dated 22-8-1980 calling upon them to show cause why an amount of Rs. 1,810.51 should not be recovered from them as Special Excise Duty payable for their clearances during 6-8-1980 to 15-8-1980 of house-hold and laundry soaps and why penalty also should not be levied for contravention of Rules 173F and 173G(1) of Central Excise Rules.

2. The ground mentioned in the notice was that the appellants cleared the goods without payment of Basic Excise Duty by virtue of benefit under Notification No. 201/79 and claimed that they were, therefore, not liable for Special Excise Duty also but that they were not correct in taking up such a position. The appellants sent their reply.

3. After adjudication, the Assistant Collector of Central Excise, Calcutta under his order dated 21-11-1980 rejected the contentions of the appellants and confirmed the demand for payment of Special Excise Duty mentioned earlier and further imposed a penalty of Rs. 500/-. The appeal against the said order was rejected by the Appellate Collector of Central Excise, Calcutta under his order dated 6-3-1982. The revision petition by the appellants against the said order has been received on transfer and is being disposed of under this order as an appeal before this Tribunal.

4. We have heard Shri K.R. Mehta, Consultant for the appellants and Mrs. V. Zutshi, S.D.R. for the respondent Collector. We have perused the necessary records.

5. In respect of the soaps manufactured by them the appellants claim benefit under Notification Nos. 24 of 1975 and 25 of 1975, both dated 1-3-1975, as also Notification No. 201 of 1979, dated 4-8-1979. The fact that the appellants are entitled to benefit under all these three Notifications is not disputed by the department. The appellants contend that the Basic Excise Duty payable has to be ascertained with reference to the benefit claimed under all the above said three Notifications and the Special Excise Duty will then have to be calculated with reference to the Basic Excise Duty so found payable. According to them the Basic Excise Duty payable after affording them benefit under all the above Notifications was 'nil' during the relevant period and therefore the Special Excise Duty payable was also 'nil'. On the other hand, the finding of the lower authorities is that the Basic Excise Duty payable after affording benefit under Notification Nos. 24 of 1975 and 25 of 1975 has to be ascertained and the Special Excise Duty will have to be calculated with reference to the said Basic Excise Duty, though subsequently, at the lime of clearance of the goods, further concession may be granted in respect of the Basic Excise Duty under Notification No. 201 of 1979.

6. Shri Mehta contends that such an approach on the part of the department was incorrect. He pointed out that Section 5 of the Finance Bill, 1980 (under which the Special Excise Duty in dispute was being claimed) was to the effect that the Basic Excise Duty was to be computed with reference to the duty levied under the Central Excises and Salt Act read with any Notification in force in relation to the duty so chargeable. Section 5(1) reads as follows :

"5. Special duties of excise-(1) In the case of goods chargeable with a duty of excise under the Central Excises and Salt Act, 1944 (1 of 1944) as amended from time to time (hereinafter referred to as the Central Excises Act) read with any notification for the time being in force issued by the Central Government in relation to the duty so chargeable, there shall be levied and collected a special duty of excise equal to five per cent of the amount so chargeable on such goods."

He, therefore, contends that the distinction made by the department in this regard between Notifications 24 of 1975 and 25 of 1975 on the one hand and Notification No. 201 of 1979 on the other hand is improper.

7. We find that all the three notifications having been issued under Sub-