1. Appeal under Section 35B of the Central Excises and Salt Act, 1944 praying that in the circumstances stated therein, the Tribunal will be pleased to order rebate of duty on raw materials used in the manufacture of detergent products by the appellants.
2. This appeal coming up for orders upon perusing the records and upon hearing the arguments of Shri H, Hayagreevan, Dy. Materials Manager of the appellant company and upon hearing the arguments of Shri J.M.K.Sekhar, Senior Departmental Representative for the respondent, the Tribunal makes the following Order : 3. This is an appeal against the order of the Collector of Central Excise (Appeals), Madras, dated 5-4-84 in C. No. V/14AA/2/84 confirming the order of the Assistant Collector of Central Excise, Kozhikode Division, Kozhikode, dated 5-12-83 disallowing proforma credit availed of by the appellants prior to 11-12-1979 in a sum of Rs. 44,638.40. The appellants manufacture detergent products such as cakes, bars and powder classified under Traiff Item 15AA (organic surface active agent) for the manufacture of which they get a number of chemicals from outside. The chemicals which the appellants procure from outside for the manufacture of detergent cakes etc. come under Tariff Item 68 and in respect of such items which are excisable and which fall within the ambit of Tariff Item 68 and which are used as a raw material for the manufacture of detergent cakes, etc. by the appellants, the appellants in conformity with Notification No. 201/79, dated 4-6-79 have availed proforma credit. In the instant case, in respect of one of the items, viz., optical bleaching agent known as Ranipal which comes under Tariff Item HDD, the appellants, according to the Department, did - not specifically take out an application seeking permission of the authorities for availing proforma credit in accordance with Rule 56A procedure. It is in these circumstances proceedings were initiated against the appellants by issue of a show cause notice which ultimately culminated in the impugned order now appealed against.
4. Shri Hayagreevan, Deputy Materials Manager of the appellant-company submitted that on 30-7-79 they made an application to the Superintendent of Central Excise, Manjeri, M.O.R., seeking permission to avail proforma credit in respect of synthetic organic products-RANIPAL-along with various other items specified therein. It was urged that merely because specific Notification No. 99/66-C.E.covering the item in question viz. RANIPAL, has not been mentioned and a wrong Notification No. 201/79 was mentioned, the Department has erroneously disallowed proforma credit after a period of about 31 years. It was contended that the appellants have been following all the procedural formalities enjoined on them under Rule 56A and a wrong quoting of a notification or mis-quoting of a notification should not be a ground on the basis of which the appellants should be denied proforma credit. The appellants therefore contended that when indisputably optical bleaching agent viz. RANIPAL, is exempted from payment of duty in terms of Notification No. 99/66-C.E. if it is used in the manufacture of certain surface active preparation and washing preparation falling under Tariff Item 15AA (detergent cakes) and if the procedure set out in Rule 56A is followed, the mere fact that correct notification number has not been mentioned would not wipe out or obliterate the substance of the prayer of the appellants seeking permission from the Department to avail proforma credit in respect of a raw material RANIPAL. Finally it was urged by the appellants that the RT 12 returns submitted by the appellants have been assessed by the authorities and approved as correct, and with reference to the appellants availing proforma credit for RANIPAL, when RT 12 returns have been assessed after verifying the relevant RG 23 Part II registers, it is not open to the Department to disallow proforma credit on a technical ground that there was no specific application mentioning Notification No. 99/66-C.E.5. The learned SDR submitted that the appellants would be entitled to avail proforma credit in respect of optical bleaching agent-RANIPAL-in terms of Notification No. 99/66. He also conceded the fact that RT 12 returns of the appellants have been assessed and approved by the authorities after proper verification of the relevant registers viz. RG 23 Part II. But he urged that while seeking permission by means of an application to the Department to avail proforma credit the appellants should have specifically referred to Notification No. 99/66 since optical bleaching agent-RANIPAL-is an item falling under Tariff Item 14D which will be entitled for exemption only under the said notification. Since there was no specific prayer mentioning the specific notification number in the application, the authorities cannot be said to be wrong if they had denied the appellants the proforma credit availed of by them.
6. I have carefully considered the submissions of the parties herein.
The only issue that arises for determination in the appeal is as to whether the availing of proforma credit by the appellants in respect of optical bleaching agent-RANI PAL--which admittedly is used as a raw material in the manufacture of detergent cakes is in conformity with the procedure set out in Rule 56A. The learned SDR conceded the fact that the appellants did send a communication to the Department on 30-7-79 claiming rebate in respect of RANIPAL. Indeed, it has also been adverted to in the order of the original authority. The only ground on which the appellants had been denied the proforma credit is that the appellants had not specifically mentioned the correct Notification No.99/66-C.E. It is a settled proposition of law that in respect of a procedural formality if there is substantial compliance, the mere omission to quote the correct provision of law or the correct notification number could not be a circumstance on the basis of which a person can be denied relief. In such matters one should go by the substance rather than by the label or heading or form. Indeed, this position is no longer res Integra and is covered by a number of authorities. In the ruling reported in (1981) 94 L.W. 343 at p. 349 in the case of Dorai Knitting Company v. E. Ramasubramanian, the Madras High Court has expatiated on this legal proposition with citation of case law. The misdescription of a provision of law in the heading of a petition should not be the sole criterion to dismiss an application on the ground that it was not maintainable in law. The Supreme Court in the ruling, reported in AIR 1977 S.C. 1146 in the case of Vice-Chancellor, Jammu University v. Dushinant Kunwar Rampal has held that when an authority makes an order which is otherwise within its competence, it cannot fail, merely because it purports to be made under a wrong provision of law, if it can be shown to be within its powers under any other provision. In other words, the ratio of the decision is that a wrong label cannot vitiate an order which is otherwise within the power of the authority to make. Likewise, a wrong quoting of a section or notification is not conclusive with reference to the provision of law applicable and the correct provision of law has to be ascertained by scanning the substance. The Full Bench of the Madras High Court in the case of K. Suresh Babu v. K. Balasubramaniam and another, reported in 1980 TLNJ 441 has observed that an erroneous statutory provision quoted or cited cannot determine the scope of the rights and liabilities of the parties and the Court will have to decide them in accordance with the correct provisions of law applicable to the facts alleged and established.
7. A reading of the letter dated 30-7-79 clearly shows that the appellants were seeking the benefit of rebate in respect of RANIPAL and have no doubt wrongly quoted the notification number. Such mis-quoting of the notification number would not go to the root of the matter when the substance of the application is one seeking permission of the Department to avail rebate or proforma credit. This aspect of the matter has not been considered by the appellate authority. Even in respect of the procedural formalities enjoined on the appellants under Rule 56A, since there is more than substantial compliance, I am of the view that the appellants would be entitled to avail proforma credit on and from 30-7-79. Apart from this, I also take into consideration in this context the fact that the RT 12 returns of the appellants have been assessed as correct by the authorities who presumably must have also looked into RG 23 Part II which should have given a clear indication that the appellants were availing proforma credit in respect of RANIPAL, the item concerned in the present appeal. Therefore taking the aforesaid twin circumstances into consideration I hold that the appellants would be entitled to avail proforma credit in respect of optical bleaching agent-RANIPAL-used as a raw material in the manufacture of detergent cakes on and from 30-7-79. Accordingly the impugned order is set aside and the appeal accordingly allowed.