1. The question for decision in this appeal to the Tribunal is whether the appellants were entitled to get exemption under Notification No.71/78-C.E., dated 1-3-1978 and whether the demand of Rs. 99,979.10 (Basic) and Rs. 4,998.95 (Special) confirmed by the Assistant Collector of Central Excise, Division-H, Ghaziabad by his order dated 31-3-1981 and upheld by the Collector (Appeals) Central Excise, New Delhi by his order dated 17-3-1983 is correct.
2. The appellants, a small scale manufacturers, inter alia are engaged in the manufacture of products falling under Tariff Item 34A of the First Schedule to the Central Excises and Salt Act, 1944 (hereinafter called Act). One of the products manufactured and cleared by the appellants is Pistons. They filed a Classification List on 30-3-1978 effective from 1-4-1978 claiming benefit of Notification No. 71/78-C.E.at nil rate of duty for the first clearance of Rs. 5 lakhs and to a chargeable rate of duty for clearances exceeding Rs. 5 lakhs and upto Rs. 15 lakhs. They claim that in the Classification List they had made a clear mention that 'this also includes the pistons meant for original Equipment'. Para-2 of Notification No. 71/78-C.E., dated 1-3-1978 so far as material for the present appeal provides that the benefit of the Notification would not be available to manufacturers who availed of the exemption under Notification No. 101/71-C.E., dated 29-5-1971. The said Notification exempts Motor Vehicle parts named therein from the whole of the Excise duty levied thereon on the condition that Collector of Central Excise is satisfied that the parts are intended to be used as original equipment part by the manufacturer of Motor Vehicles and in relation to the concession the procedure set out in Chapter-10 of the Central Excise Rules, 1944 has been followed. It may also be stated that by notification No. 237/79-C.E., dated 30-7-1979, notification No.71/78-C.E., dated l-3-!978 was amended and paragraph-2 of the notification was omitted.
The Superintendent of Central Excise, M.O.R. III, Sahibabad issued Show Cause Notice dated 3-4-1979 to the appellants inter alia charging that appellants have availed of exemption under Notification No. 71/78-C.E., on goods valued at Rs. 4,99,895.41 wrongly and irregularly through misstate-ments of facts and contrary to the provisions of Notification No. 71/78, dated 1-3-1978. They have not included the value of goods supplied to Original Equipment Manufacturers on Nil rate of duty under Notification No. 101/7!, dated 29-5-1971, Notification No. 153/71-C.E., dated 26-7-1971 cleared during the financial year 1978-79 from 1-4-1978 to 30-11-1978. The appellants showed cause and submitted that proper classification list had been filed and there was no suppression and in any case the Department could at best realise duty only on goods valued at Rs. 41,358.00. They also submitted that the show cause notice was time-barbed as it was issued beyond 6 months from the date of payment of duty. The Assistant Collector negated this contention and by his order dated 31-3-1981 confirmed the demand, the order was upheld in appeal by Collector of Central Excise (Appeals), New Delhi by his order dated 17-3-1983, hence the present appeal.
3. At the hearing of the appeal, Sh. D.N. Mehta, learned Consultant for the appellants submitted that para-2 of the Notification No.71/78-C.E., could not curtail the main para of the Notification and on the strength of this para benefit of the notification could not be denied to the appellants. He further submitted that notification No.237/79-C.E., dated 30-7-1979 amended and deleted para-2 of Notification No. 71/78. The obvious intention was that manufacturers could get simultaneously benefit of Notification Nos. 71/78 and 101/71. This amendment was clarificatory in nature and should apply retrospectively even to the appellants. He further submitted that in the Classification List, the appellants had clearly in the remarks column mentioned "this also includes the pistons meant for original equipment". In view of this remark it was clear to the Excise authorities that the appellants were availing of the benefit of Notification No. 101/71 and it was therefore wrong to say that there was any suppression on the part of the appellants. The authorities approved the classification list with full knowledge of this fact and allowed the clearances in terms of notification No. 71/78-C.E. On these arguments, he urged that the appeal should be allowed and the demand against the appellants be set aside. In support of his arguments, he relied on the following cases : (ii) Mis. Tata Yodogawa v. The Assistant Collector of Central Excise and Ors. 1983 E.C.R. 227D (Patna-Ranchi)=-1983 E.L.T. 17 (Pat.);Shambhu Nath & Sons Ltd. v. Collector of Central Excise ChandigarhUnited Electrical Industries Ltd., Quilon v. Collector of Customs, Bombay 4. On behalf of the respondent, Sh. V. Laxmi Kumaran, Senior Departmental Representative submitted that in the Notification No.37/79-C.E., there is nothing to show that the amendment was clarificatory in nature. There is no contradiction in para-2 of Notification No. 71/78-C.E., and its main part, and thereby para-2 could not be ignored. Deletion of para-2 by Notification No.237/79-C.E., could not help the appellants, because at the material time this amendment had not come into force. The Classification List filed by the appellants was vague and did not clearly mention Notification Nos. 101/71-C.E. and 153/71-C.E., whose benefit the appellants had availed of in respect of the original equipment. On the facts and circumstances of the case, it was specifically necessary for the appellants to have made mention of these notifications so that the Excise authorities could not have been mis-lead into approving the classification list filed by the appellants and allowing them clearances at nil rate of duty in respect of first clearance for home consumption on aggregate value not exceeding Rs. 5 lakhs. The appellants were guilty of suppression. The claim was therefore justified and within time. He submitted that the appeal should be dismissed.
5. We have carefully considered the arguments advanced by the parties.
We do not agree that para-2 of notification No. 71/78-C.E., in its ordinary meaning and grammatical construction leads to a manifest contradiction or to some confusion or inconvenience or absurdity or hardship or injustice. The obvious intention of the notification was not to provide benefit of notification to those manufacturers who were availing of benefit of Notification Nos. 101/71 and 153/71-C.E. The Department of Revenue, at the material time, might have had reasons for doing so and it is not possible for us to speculate as to what must be the possible reason. We should give effect to the notification as it stands at the material time. As to the contention that amendment under notification No. 237/79-C.E. should apply retrospectively. We do not accept this contention also. There is nothing to show that the amendment was clarificatory in nature. Had it been so, it would have been clearly so worded. Fiscal policies of Government can be changed from time to time and they may have had there own reasons. In not having accorded benefit at some earlier period which they thought proper to do at a later period.
As to the contention that the appellants had made full and proper disclosure in the classification lists, we are afraid that on going through the classifications lists, we cannot agree with Sh. Mehta in his this contention. A note in the remarks column 'this also includes Pistons meant for original equipment' cannot lead to an inference that the appellants were availing of the benefit of Notification Nos.
101/71-C.E. and 153/71-C.E. in respect of original equipment. To say the least the remark was vague and was likely to and had in fact mis-lead the Excise authorities. Had the Notification Numbers been mentioned the appellants would not have got the benefit of Notification No. 71/78-C.E., which they had availed of. We agree with the learned Departmental representative that the appellants were guilty of suppression. Once it is found that the appellants were guilty of suppression, the demand of duty made from the appellants must be held within time.
It was contended by the appellants that at best duty in respect of original equipment worth Rs, 41,358.00 could be realised from them, We do not agree that Notifications Nos. 101/71-C.E. are not conditional upon Notification No. 71/78 whereas conve no doubt the respondent, Sh V. Laxmi Kumaran 101/71.C.E. in respect of Motor Vehicle parts intended to be used as original equipment. We therefore hold that the appellants would not be denied this benefit.
In view of the foregoing, seeing no force in the appeal, we dismiss the same.