K.S. Dilipsinhji, Member (T)

1. The Collector of Central Excise, Bombay-II, has authorised the Deputy Collector to file the present appeal against the Order No. C-859/BII-192/83 dated 19.4.83 of the Collector of Central Excise (Appeals), Bombay, under which the Collector (Appeals) gave the benefit of Rule 56-A concession to the extent of Rs. 2922.69 to M/s. Garware Paints Ltd. Since the Collector of Central Excise, Bombay-II, received the order of the Collector (Appeals) on 21.4.83 and the appeal on his behalf was filed in the Registry on 30.7.83, there was a delay of 9 days which required condonation before the appeal could be taken up on merits. Accordingly, the Departmental Representative was asked to state what reasons the appellant had in favour of the request for condonation of the appeal, which request was contained in the Deputy Collector's letter addressed to the Registry. The Departmental Representative was also informed as to why no application in proper form was filed for condoning the delay. The Departmental Representative agreed with my views regarding the procedural lapse but made an oral request for condoning the delay on grounds of consultation 'with concerned officers. Sri Divekar for the respondents opposed the request and urged that the reasons stated by the Departmental Representative for condonation were not valid. He also cited the decision of the Tribunal, ELT 1985 (21) p.709 to say that the request of the appellant should be rejected, following the ratio of the Tribunal's decision in that case.

2. I reserved my decision in this behalf pending arguments by both the sides on merits.

3. The next question which I posed to the appellant was the fact that the amount involved in the appeal was less than Rs.10,000/-, and therefore, I would like to know whether the appeal should be admitted for hearing under the proviso to Section 35B(1) or whether the appeal to be refused such admission. The Departmental Representative urged that the matter involved an interpretation of law, namely, Rule 56-A, and even though the amount involved was small, the appeal raised an important issue of interpretation of law which will have to be followed by the Central Excise Authorities. He, therefore, urged me to admit this appeal for the purpose of decision on merits. I also reserved my decision in this behalf pending arguments on merits by both the sides.

4. Explaining the merits of the appeal Shri Pattekar stated that special duty of excise was abolished under Notification No. 91/79 dated 1.3.79 on pigments, colours, paints, varnishes etc. falling under item 14 of the Central Excise Tariff. However, the respondents had a sum of Rs. 2922.69 in their R.G.23 account as credit of special excise duty paid on the raw materials. The respondents transferred this credit from R.G.23 account for special excise duty to the similar account for the basic excise duty paid on the raw materials. This transfer was without the Assistant Collector's permission, and therefore, the department raised an objection to this action. The respondents accordingly, retransferred this credit amount to the special excise duty account as in the meanwhile special duty was reimposed under the Finance Bill of 1980. The respondents utilised this credit towards discharging of liability on their goods towards the special excise duty. The Superintendent of Central Excise issued a show-cause notice dated 22.12.80 to M/s. Garware Paints Limited, asking them as to why an amount of Rs. 2922.69 should not be recovered under Rule 10 of the Central Excise Rules, 1944, as the amount of credit had lapsed in terms of Rule 56-A(2) and (3)(VI)(b). In their reply dated 19.1.81 to the show cause notice the respondents refuted the contentions, but the Assistant Collector confirmed this demand under his order dated 14.5.82. The respondents then filed the appeal to Collector (Appeals) and Shri Pattekar drew my attention to the finding of the Collector in his order that since the credi