1. M/s. Synthetic Poly wood India (P) Limited on 21-10-1982 applied for a refund of Rs. 1,96,869.65 as duty paid by mistake during the period 1-4-1982 to 22-9-1982. This was on the basis that they were entitled to avail of the exemption under Notification No. 80/80, as amended, during the financial year 1982-83 but had paid duty by mistake without availing the exemption, payment having been made by adjustment in their personal ledger account. They had sent the refund application with a covering letter giving details of the clearances, etc., which entitled them for exemption under Notification No. 80/80 aforesaid. They pointed out that wooden bobbins, shuttles, etc., manufactured by them were classified under Tariff Item No. 68 upto 27-2-1982 and they had availed of exemption on such manufactures under Notification No. 105/80 but that from 28-2-1982 the said articles were classified under Tariff Item No. 16B and were brought under the heading "specified goods" under Notification No. 80/80, their other manufacture being Resin which falls under Tariff Item No. 15A (1). They pointed out that in 1981-82 their duty paid clearances amounted to Rs. 3,42,264.49, their exempted clearances being Rs. 19,06,779.94 and therefore under Notification No.80/80, their clearances of all excisable goods in 1981-82 was less than Rs. 20 lakhs and therefore they were entitled to benefit of exemption under Notification No. 80/80 in 1982-83 but without taking note of the same they had been paying duty as earlier mentioned.
2. The Assistant Collector, under notice dated 8-11-1982, pointed out that their claim that their clearances falling under Tariff Item No. 68 during the previous financial year should not be taken into account for determining their eligibility for availing the benefit under Notification No. 80/80 was not proper and had in fact been earlier rejected and therefore they were to show cause why their refund application should not be rejected. The respondents reiterated their contentions in their letter dated 30-10-1982.
3. On adjudication the Assistant Collector under order dated 4-4-1983 rejected the refund claim. This was on the basis that even according to the figures furnished (as mentioned earlier) the clearances by the respondents of all excisable commodities during 1981-82 had exceeded Rs. 20 lakhs, and therefore they were not eligible for the exemption claimed under Notification No. 80/80 during the year 1982-83. On appeal by the respondents, the Collector (Appeals) under his order dated 25-8-1983 allowed the appeal and ordered that the refund claim should be examined afresh, holding that the respondents were entitled to exemption claimed under Notification No. 80/80. In passing this order he relied upon the reasoning given by him in an earlier order dated 6-4-1983, relating to an appeal filed by M/s. Coromandel Cartons and Containers Private Limited, Visakhapatnam. It is against the order of the Collector (Appeals) dated 25-8-1983 that the Collector of Central Excise, Guntur has preferred the present appeal.
4. We have heard Sri K.D. Tayal, Senior Departmental Representative for the Appellant Collector and Sri G. Prabhakar Sastry, Advocate for the respondents.
5. The figures of clearances during 1981-82 are not in dispute and are as extracted in the letter of the respondents dated 13-10-1982. The respondents admittedly manufactured resin as binding material and wooden bobbins, shuttles, etc., of plywood for jute industries. Resin falls under Tariff Item No. 15A(1) and had been cleared in 1981-82 to the value of Rs. 2,15,384.89. Wooden bobbins, shuttles, etc., fell under Tariff Item No. 68 during the year 1981-82 upto 27-2-1982 and till that date were being cleared as duty exempted goods under Notification No. 105/80. Thereafter they were shifted to Tariff Item No. 16B and were therefore no longer eligible for exemption under Notification No. 105/80 and were cleared thereafter on payment of duty, duty paid between 28-2-1982 to 31-3-1982 being Rs. 1,26,879.60. Thus during 1981-82 the duty paid clearances amounted to Rs. 3,42,264.49 and exempted clearances amounted to Rs. 19,06,779.94 6. The exemption under Notification No. 80/80 is in respect of "specified goods", namely goods specified in the table attached to the notification. After the wooden bobbins, etc., were shifted to Item 16B they fell under the description of specified goods under the Notification No. 80/80. Paragraph 2 of Notification No. 80/80 reads as follows : "2. Nothing contained in this notification shall apply to a manufacturer (i) if the aggregate value of clearances of all excisable goods by him or on his behalf, for home consumption, from one or more factories, during the preceding financial year, had exceeded rupees twenty lakhs.
(ii) if the aggregate value of clearances of the specified goods by him or on his behalf, for home consumption, from one or more factories, during the preceding financial year, had exceeded rupees fifteen lakhs." It is the said paragraph as also Explanation IV that are relevant for appreciating the contentions of both parties in this case. The said Explanation IV reads as follows : "Explanation IV.For the purposes of computing the aggregate value of clearances under this notification, the clearances of any specified goods, which are exempted from whole of the duty of excise leviable thereon by any other notification issued under Sub-rule (1) of Rule 8 of the Central Excise Rules, 1944 and for the time being in force, shall not be taken into account." 7. The Assistant Collector had held that on the figures furnished the clearances had exceeded Rs. 20 lakhs by way of clearance of all excisable goods and therefore the respondents were not eligible for the exemption claimed. But the Collector (Appeals) held that under Explanation IV the respondents were entitled, in computing their clearances in the previous year, to exclude, under Explanation IV abovesaid, the clearances of specified goods which had been exempted under any other notification. He held that in applying this principle under Explanation IV it had been noted that wooden bobbins, etc., were specified goods in 1982-83 (though not in 1981-82) and the clearances of these goods (though not specified) in 1981-82 were also to be excluded as mentioned in Explanation IV and if so excluded the aggregate value of clearances fell within the limits prescribed in Notification No. 80/80.
8. The contention of Sri Tayal is that for exclusion under Explanation IV the goods must have been specified goods during the previous year and it would not suffice if they became specified goods in the subsequent year only. On the other hand Sri Prabhakar Sastry contends to the contrary and supports the findings of the Collector (Appeals).
He further relies upon the words of the subsequent Notification No.83/83 (which replaced Notification No. 80/80) and points out that in that notification the words are significantly different, excisable goods being mentioned in the place of specified goods in Explanation IV. Neither side has brought to our attention any decided authority, either of the Tribunal or of the Courts, on this point.
9. We have further taken into consideration the fact that in Explanation IV the present tense is used with reference to clearance of specified goods since the words are "the clearances of any specified goods which are exempted from whole of the duty..." (underlining supplied for emphasis).
It is therefore to be considered whether the use of the present tense would indicate that this Explanation IV is to be applied only in respect of computing the aggregate value of the clearances during the year in question and not with reference to clearances during the previous year.
10. We have bestowed our careful attention in this matter. The portions of the notification which are relevant in the present case are paragraph 2 of the notification and Explanation IV, these having been extracted supra. Paragraph 2 refers to the aggregate value of the clearances, either of the excisable goods or of specified goods, different limits being prescribed for either. Explanation IV also relates to computation of the aggregate value of the clearances under the said notification. Therefore, there would appear to be no doubt that paragraph 2 has to be interpreted in the light of the directions in Explanation IV. Hence it appears clear that even in respect of computation of the aggregate value of clearances of all excisable goods the value of the specified goods which had been exempted under any other notification will have to be excluded. The remaining question is whether the words "specified goods" in Explanation IV relate to goods which were specified in the previous year and continued to be specified goods in the current year also or whether these words would not apply to goods which were not specified in the previous year though they have been declared to be specified goods for the current year for which exemption was being claimed. In the present instance wooden bobbins, etc., were specified goods in 1982-83 but were not specified goods in 1981-82. With reference to Explanation IV, even. if the present tense used therein is given importance, these goods would be specified goods in the current year qualifying for exemption under another notification. But it does not appear to us necessary that in calculating the aggregate value of clearances for the purposes mentioned in paragraph 2, the value of such goods (wooden bobbins, etc.), should not be excluded in calculating the aggregate value of clearances. Explanation IV merely stated that, for the purposes of computing the aggregate value of clearances, the clearances of any specified goods which are exempted from the whole of the duty of excise under any other notification shall not be taken into account. The Explanation does not state that such specified goods which are exempted in the current year should have been specified goods in the previous year also. Therefore we feel that what is to be seen is whether particular goods are specified goods in the current year and are qualified for exemption under any other notification and thereafter verify whether these goods (whether specified or not) were also cleared in the previous year and, if so, exclude the value of clearances of these specified goods in computing the aggregate value of clearances under paragraph 2. This is the reasoning of the Collector (Appeals) also. As earlier mentioned, there are no decided authorities on this point which could be applied. Hence following the above conclusion, we hold that the order of the Collector (Appeals) was proper.