B.B. Gujral, Vice President

1. Messrs Ahmedabad Chemicals Pvt. Ltd., Ahmedabad, have filed this Appeal dated 31st January, 1983 against the Order-in-Original No. 10/MP/82 dated 11-1-1982 passed by the Collector of Central Excise, Baroda. The appellants are a private limited company owning a factory in Ahmedabad wherein they manufacture S.O. Dyes and Dye Intermediates, namely, Rhodamine and diethyl meta amino phenol (DEMAP) falling under Tariff Item No. 14D and Tariff Item No. 68 of the Central Excise Tariff. The appellants have stated that they filed the necessary declaration for availing of exemptions from licensing control and also from payment of duty as required under Notifications Nos 111/78, dated 9-5-78,89/79, dated 1-3-79, No. 105/80 dated 19-6 80, No. 71/78, dated 1-3-78 and No. 80/80, dated 19-6-80, before the Central Excise Officers. On 16-9-81 some Central Excise Officers visited the appellants' factory and seized certain documents, including audited balance sheet for the year ending 31-3-80 along with the Director's report. They also recorded the statements of the Chief Executive of the factory on 29-9-81 and 17-11-81. On 23-4-82, the Superintendent, Central Excise issued a Show Cause Notice to the appellants that they were not entitled to the benefit of exemption from licensing control and from payment of duty under Notifications Nos. 111/78, dated 9-5-78, 89/79, dated 1-3-79 which was later replaced by Notification No. 105/80, dated 19-6-80 on the ground that the value of plant and machinery as shown in the Schedule of Fixed assets in the balance sheet of the company was more than Rs. 10 lakhs. The Collector of Central Excise, Baroda did not accept the appellants contentions that the amount shown in the Schedule of Fixed assets in the balance sheet did not represent only the value of plant and machinery but it was consolidated amount comprising of the expenses incurred on purchase of machinery, plant and equipment, consumable stores, spare parts, labour charges for installation and erection, technical know how, etc. These expenses qualified for deduction from the total balance sheet amount, namely, Rs. 10,22,057/-. The particulars about these expenses had already been supplied to the officers of Central Excise who had recorded the statements of the Chief Executive of the Company on 17-11-81 and later, by their letter dated 11-11-81. The Collector of Central Excise, Baroda, did not accept the appellants' contention and confirmed the charges levelled in the Show Cause Notice. He ordered recovery of duty on the value of Rs. 17,05,820/- of the DEMAP sold during the year 1980-81 and imposed a penalty of rupees ten thousand on the appellants. In their appeal to the Tribunal, the appellants have stated that the Order-in-Original passed by the Collector of Central Excise, Baroda, is not correct and legal, since it is based on incorrect interpretation of the Notifications Nos. 89/79, dated 1-3-79 and 105/80, dated 19-6-80. They referred to the Explanation appended to the Notification No. 89/79 and 105/80 which reads as "For the purpose of determining the value of any capital investment only the face value of the investment at the time when such investment was made shall be taken into account." They also referred to the relevant instructions issued by the Government of India in relation to the computation of value of investment on plant and machinery. He also relied on the Trade Notice No. 315/75 dated, 6-10-75 issued by the Collector of Central Excise, Baroda, wherein certain guidelines were given regarding the manner in which capital investment on the plant and machinery should be determined for the purpose of levy of central excise duty in respect of Notification No. 199/75 relating to exemptions for electric wires and cables under Item 73-B of the C.E.T. He also referred to Baroda Collectorate Public Notice No. 152/77, dated 28-6-77 in relation to Notification No. 176/77 dated 18-6-77 relating to Tariff Item No. 6