1. A question relating to the construction of Notification Nos. 230/72 and 23/75 arises in this Revision/ proceeding transferred to the Tribunal pursuant to Section 35P of the Central Excises and Salt Act, 1944, and heard and disposed of as an appeal along with four other matters, being Appeal Nos. 45 to 48/77-C. (a) pursuant to the aforesaid Notifications, the Appellant filed five separate claims of rebates before the Asstt. Collector of Central Excise for the periods November-December, 1973; January-February 1974 ; January-February, 1975 ; March-June, 1975 and July-December, 1975 respectively ; (b) out of the aforesaid five claims, the Assistant Collector granted the rebate initially for the periods November-December 1973 and January-February, 1974 ; but then he issued notices dated the 12th October, 1975 and 17th October, 1975 requiring the Appellant to show cause why the rebates already granted may not be recovered back, an erroneous payment. For the three remaining claims it would appear the Asstt. Collector had granted rebate partially ; (c) the Appellant preferred five appeals, one in respect of each claim of rebate, before the Appellate Collector of Central Excise & Customs, New Delhi, all dismissed by a common order dated the 30th November, 1976 ; (d) the Appellant thereupon preferred one single revision application under Section 36 of the Central Excises and Salt Act, 1944, as it was at the relevant time, in respect of all the five appeals. The aforesaid Revision application was transferred to the Tribunal and numbered as Appeal No. 19/77-C.3. At the very outset the Appellant's counsel was required to state how one single Revision application could maintain against dismissal of five appeals, albeit by a common order. If one single Revision cannot maintain the counsel was required to identify any single appeal to Collector or claim for rebate which he would like to pursue in the instant transferred proceeding.
4. The learned counsel sought to justify a single Revision in respect of five separate appeals/claims for rebate on the ground that it was, after all, one single order in appeal of the Appellate Collector which was required to be revised, and that it was a common order relating to five separate appeals is not of any consequence. His contention was obviously untenable. He, however, offered to pay the fees in respect of the other remaining four matters and prayed for treating the single Appeal No. 19/77 as five different appeals and for condonation of delay. The request was acceded to in view of the prevailing practice with the Revisional Authority of entertaining a single Revision against a common order in a plurality of appeals involving identicial questions of facts and law and the resulting hardship if we are now to confine the hearing of appeal in one claim for. rebate instead of five different claims. Accordingly, the Appellant was permitted to file identical copies of Grounds of Appeal in respect of its other four claims for rebate as well on payment of separate set of fees in regard to them, condoning the delay and they are numbered as Appeal Nos. 45 to 48/77-C.5. All the appeals have been heard together, and are disposed of by this order.
6. The facts are not in dispute. The Appellant manufactured vegetable products and margarine at the relevant period. It would appear that with a view to encourage the use of cotton seed oil in preference to groundnut oil in the manufacture of vegetable products, the Government of India issued the aforesaid Notifications, exempting those vegetable products in the manufacture of which indigenous cotton seed oil is used in excess of the prescribed percentage and cleared from a factory in any quarter of a financial year. The sole issue that arises in these proceedings relates to the manner and method of computing the extent of exemption in terms of the aforesaid Notifications.
7. While the Appellant contends that in working out the percentage of cotton seeds oil used for the manufacture of vegetable products it is only that quantity of vegetable products in which cotton seed oil was used as a component and cleared over a quarter that has to be taken into account rather than such other vegetable products or margarine that may be manufactured and cleared by the Appellant in which no cotton seed oil was made use of or the aggregate of all vegetable products manufactured by the Appellant over the quarter, the Assistant Collector as well as the Collector Appeals have both held that the computation of the percentage of cotton seed oil has necessarily to be in relation to the totality of vegetable products and margarine cleared from a factory in any quarter of a financial year. The Appellant's counsel also urged that the Assistant Collector had, in terms of the Statute, no power to review his earlier orders so as to recall the rebates already granted in relation to the periods November-December, 1973 and January-February, 1974. This contention does not appear to have been even adverted to by the Collector Appeals or the Assistant Collector.
8. The Appellant in the course of the arguments relied upon Trade Notice No. 144(MP) V.I.P. (27/74) as well as the proforma account of cotton seed oil used in the manufacture of vegetable products-a form prescribed by the Excise authorities.
9. It is unnecessary to decide the competence of the Assistant Collector, in terms of the Statute, to review his earlier order, in the view we propose to adopt on the construction, of the Notifications in question.
10. A perusal of the said Notifications would reveal that the exemption is clearly relatable to only such of those vegetable products which are manufactured by using indigenous cotton seed oil and cleared from a factory in any quarter of a financial year. The extent of exemption depends on the extent of the percentage by weight of the cotton seed oil used in relation to the total weight of "such vegetable products".
The expressions "such vegetable product" and "the said vegetable product" in the context in which they occur lead to the irresistable conclusion that it is only the vegetable products manufactured using cotton seed oil that have to be taken into reckoning and none others.
The columns in the proforma account prescribed also indicate that it is the totality of the vegetable products manufactured using cotton seed oil that have to be taken into account for the purposes of the exemption and not any other product manufactured over the quarter.
11. There is more to it than merely the criteria prescribed for the applicability of the Notifications. The criteria for applicability, as observed by the Appellate Collector, may be (i) manufacture of vegetable products using cotton seed oil, and (ii) clearance from a factory in any quarter of a financial year. Once the criteria are fulfilled, we are unable to see how it follows that the total quantity of vegetable products, regardless of whether cotton seed oil is used in their manufacture or not can be taken into the reckoning of the extent of exemption when it is to be in relation to a specified percentage, by weight, of the products in which it had been actually used.
12. In the result all the five appeals are allowed. The order of the Collector Appeals is set aside. The Appellant is declared to be entitled to such consequential relief in relation to all the five claims for rebate, as he may, in the light of this order, by way of rebate in the relevant periods.
13. Incidentally, it would appear that this is not a case where either the rate of duty or value for the purposes of assessment is one of the issues raised. It is the quantum of duty that is in issue, the rate of duty and limit of exemption having been admitted. The notification in question, equating, as it does, the extent of exemption to the amount calculated at the rate specified in column (3) thereof, does not refer at all to the rate of duty. The applicability of the notification is not also in dispute seeing that rebate in part was granted as per the computation adopted by the Revenue. The manner and the method of computation of the extent of rebate/exemption and consequently the quantum of duty are in issue and not the rate of duty. It could have been, therefore, heard and decided by a Division Bench of this Tribunal and not necessary by the Special Bench. However, since the matter was placed before us in the Special Bench, and we are not, either by an express provision in the statute nor by necessary intendment without jurisdiction to deal with it, we have disposed it of.
I have gone through the proposed Order of my learned Brother Shri M.Gouri Shankar Murthy and, though in full agreement with regard to the result of five appeals inasmuch as these are allowed, have not been able to reconcile myself with his view-points projected in Para 13. He has opined that it is the quantum of duty that is in issue, the rate of duty and limit of exemption having been admitted. Certain observations of my learned Brother in Para 13 itself reproduced below, coupled with the facts stated by him in paras 2(a), (b) (c), contradicts his theory and opinion that the dispute in the instant case cannot be said to be a question having a relation to the rate of duty of excise : "The applicability of the notification is not also in dispute seeing that rebate in part was granted as per the computation adopted by the Revenue. The manner and method of computation of the extent of rebate/exemption and consequently the quantum of duty are in issue and not the rate of duty." 14. To begin with, I would like to refer to Section 3 of the Central Excises & Salt Act, 1944, as also Rule 8 and Rule 192 of the Central Excise Rules, 1944. Section 3 provides that there shall be levied and collected in such manner as may be prescribed duties of excise on all excisable goods other than salt which are produced or manufactured in India at the rate set forth in the First Schedule. There is a further provision that different tariff values may be fixed. Rule 8 and Rule 192 we would like to notice to show that notifications of exemption and concession must necessarily be brought in focus and read in relation to levy of duty which in turn would mean levy at a given rate.
* * * 15. Before proceeding further, Notification No. 23/72-CE dated 15-12-1972 should also be noticed.
16. The above Notification granted exemption of certain amount of excise duty as mentioned in column 3 which in turn necessarily affected the rate of duty. A plain reading of the notification is sufficient that exemption was to be calculated at a rate in a particular manner and was not ad hoc relief as such. The rate of rebate was to be arrived at by determining the quantity of indigenous cotton seed oil used by the factory in its vegetable product. If the quantity was less than 15 per cent of such product, no exemption was available. Where, however, the percentage was more, say about 25 per cent, the exemption also increased. From this, it is clear that inclusion or exclusion of some products affected the exemption and hence the rate of duty Which a manufacturer was to bear. As far as the present case goes, there could be no scope even for argument that the applicability or otherwise of the notification did not affect the duty rate as such.
17. Sub-section (2) of Section 35-D of the Act vests exclusive jurisdiction in a Special Bench of the Tribunal to hear and decide all appeals against a decision or order relating, among other things, to the determination of any question having a relation to the rate of duty of excise or to the value of goods for purposes of assessment.
18. In Sub-section (3) of the aforesaid provision jurisdiction is conferred on the President or any other member, so authorised in this behalf by the President, sitting even singly, to hear and decide any disputed case, where the difference in duty or the duty involved does not exceed ten thousand Rupees, provided that the determination of any question having a relation to the rate of duty or value for purposes of assessment is also not in issue.
19. Clauses (a) & (b) of Sub-section (3) of Section 35-D contemplate situations where the point in issue is not in relation to the rate of duty. The provisions of Sub-section (3) have a specific purpose inasmuch as in a given case a duty may have been paid and a claim of refund is made on the ground that the payment was wrongly made or in excess of what was due. There may be more than one reason for such a claim without contesting the rate. Similar would be the case with regard to penalty. But the case in hand stands on a different footing.
It is not one of those situations where duty is paid and/or levy is being contested or exemption is being claimed which does not effect the rate. The effect of the claim of exemption under the Notification No.23/72-CE is to change the rate itself. To further elaborate the point, those cases where duties are paid--it may be excise duty or import tariff or export levy-and subsequently it is contested that they were wrongly collected, without contesting the rate or accepting certain rates, will stand on different footing than the type of cases before us where question would normally be whether an exemption notification or a concession notification issued under Rule 8 and/or Rule 192 will affect the rate of duty. Such cases certainly would involve a question in relation to rate of duty of excise which are contemplated under Sub-section (2) of Section 35-D to be dealt with by a Special Bench. To repeat, when the question comes up for determination of duty, may be with reference to an exemption or concession notification, it would necessarily affect the rate and, therefore, the question would be in relation to the rate of duty. Therefore, I cannot be a party to my Brother's viewpoint that the jurisdiction of the case did not vest but a chance factor brought the case before the Special Bench.