EAGLE FLASK INDUSTRIES LTD. versus THE COMMISSIONER OF CENTRAL EXCISE, PUNE

Citation: [2004] SUPP. 4 S.C.R. 35 · Decided: 02-09-2004 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Dismissed

Judgment (excerpt)

EAGLE FLASK INDUSTRIES LTD. 
A 
v. 
THE COMMISSIONER OF CENTRAL EXCISE, PUNE 
SEPTEMBER 2, 2004 
[ARIJIT PASAYAT AND P.P. NAOLEKAR, JJ.] 
B 
Central Excise Rules, 1944 : 
Rules 174 and 174-A-Plastic items falling under Chapter Headings 
3924.90 and 2909.6-Exemption Notifications Nos. 53188 dated 1.3.1988 
C 
-and 11188 (NT)-CE dated 15.4.1988-Assessee not filing classification/ 
declaration required under the Notifications-Claim for exemption-Held, 
for availing benefits under an exemption notification, the conditions have to 
be strictly complied with-The relevant provision makes it clear that where 
goods are chargeable to nil rate of duty or where exemption from whole of 
excise duty leviable is granted, manufacturer is required to make a declaration 
and give the undertaking as specified-Since declaration and undertaking 
were not submitted by assessee, the Tribunal was right in holding that 
exemption from operation of r.174 was not available to it-Central Excise 
Act, 1944. 
CIVIL AP PELLA TE JURISDICTION : Civil Appeal No. 4647of1998. 
From the Judgment and Order dated 8.5.98 of the Central Excise and 
Gold (Control) Appellate Tribunal, New Delhi in A. No. E/1009/1991-C in 
F.O. No. 364 of 1998-C. 
U.A. Rana, Arvind Kumar, Madhup Singhal and Sandeep Khare! for 
M/s. Gagrat & Co. for the Appellant. 
Anoop Chowdhury, Rupesh Kumar, P. Parmeshwaran and B. Krishna 
Prasad for the Respondent. 
The following Order of the Court was delivered : 
ARIJIT PASAYA T, J. : The appellants assail correctness of the order 
passed by the Customs, Excise & Gold (Control) Appellate Tribunal, New 
Delhi (in short 'CEGA T'). In the appeal before the CEGA T, the appellants 
35 
D 
E 
F 
G 
H 
36 
SUPREME COURT REPORTS [2004] SUPP. 4 S.C.R. 
A 
had challenged a duty demand of Rs. 14,95,893 and penalty of Rs. 5,000, 
as imposed by the Adjudicating Authority and confirmed by the Collector, 
Central Excise and Customs (Appeals). CEGAT dismissed the appeal. 
B 
c 
D 
Background facts are : according to the appellants, they are engaged in 
the manufacture of articles of plastic i.e. Plastic insulated wares and vacuum 
flasks. They had two factories, one at Talegaon and the other at Chinchwad. 
The former one was considered to be the main factory. It was claimed that 
during the period of dispute, i.e. from 01.03.1990 to 21.08.1990, major 
portion of the articles manufactured by them in terms of value were exempt 
from Central Excise Licensing Control' under Rule 174-A of the Central 
.Exic.se Rules, 1944 (in sho·rt 'the Rules'). Since all the goods manufactured 
in their main factory were fully exempt from duty during the relevant period, 
only a minor portion of production was carried o~t in the Chinchwad factory. 
A show cause dated 28.08.1990 was served by the Central Excise authorities 
requiring them to' show cause as to why duty shall not be levied and penalty 
imposed for failure to take out L-4 licence required for the manufacture of 
excisable goods falling under Chapter headings No. 3924.90 (Casserole) and 
3909.60 (Rigid Polyurethene Foam) falling during the relevant period and 
for the failure to file the list of excisable goods. It was alleged that there was 
failure to determine the duty liability and also that they had not maintained 
accounts of the excisable goods. They were called up to show cause why duty. 
E , sh.ould not be demanded and penalty should not be imposed for contravention 
of various provisions of the Central Exicise Act, i 944 (in short 'the Act'.). 
The appellants took the stand that since the products manufactured were 
chargeable to nil rate of duty and si~ce they were also exempted from 
Licensing Control under Notification 11/88 (NT)"CE dated 15;04.1988, there 
was no liability or requirement on their. part to obtain ·L-4 licence. It was · · 
further submitted that the 
Superintend~nt of Central Excise had· been 
informed about the aforesaid aspects by letter dated 04.04.1.990. As regards 
the Rigid Polyurethene Foam is concerned, the appellants claimed that the 
said item was non-excisable, as held in the assessee's own case for an earlier 
G 
H 
period. As regards the manufacture of goods at Chinchwad factory, the 
appellants took the stand that the said factory was a subsidiary unit of their 
main factory and all the materials required for the manufacture of goods were 
supplied by the main factory and the sales were also effected from the main 
factory. The Adjudicating Officer held that merely be

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