ivil Appeal No 943 Of 1986
From the Judgment and Order dated 4th July 1985 of the Appellate Tribunal in Appeal No 244 of 1985 D LM Singhvi and KK Bhaduri for the appellant
A Subba Rao and Ms section Relan for the Respondent
The Judgment of the Court was delivered by CHINNAPPA REDDY J
This appeal is directed against a judgment of the Customs Excise and Gold Control Appellate Tribunal in regard to the manner and sequence in which certain notifications under Rule 8 Sub rule 1 of the Central Excise Rules granting exemptions from duty have to be worked out
By a notification dated August 1974 the Central Government in exercise of its powers under subrule1 of Rule 8 of the Central Excise Rules exempted
Tyres for motor vehicles failing under sub item1 of Item No 16 of the First Schedule to the Central Excise and Salt Act 19441 of 1944 from so much of the duty of excise leviable thereon as is in excess of fifty five per cent Ad valorem
200 Thereafter on June 16 1977 another notification was issued in the following terms In exercise of the powers conferred by sub rule 1 of Rule 8 of the Central Excise Rules 1944 the Central Government hereby exempts all excisable goods hereinafter referred to as the said goods on which the duty of excise is leviable and in the manufac ture of which any goods falling under Item No 68 of the First Schedule to the Central Excise and Salt Act 1944 1 of 1944 hereinafter referred to as the inputs have been used from so much of the duty of excise leviable thereon as is equivalent to the duty of excise already paid on the inputs
Notification No 20577 dated 28977 subject to the condi tions that the manufacturer furnishes to the proper Officer a statement showing the quanti ty of the inputs used in the manufacture of every unit of the said goods
Provided that where the duty of excise levi able on the said goods is less than the amount of duty of excise paid on the inputs the extent of exemption shall be restricted to the duty of excise on the said goods A Further notification was issued on July 14 1978 and this was in the following terms In exercise of the powers conferred by sub rule1 of rule 8 of the Central Excise Rules 1944 the Central Government hereby exempts tyres and tubes excluding flaps failing under Item No 161 and 183 of the First Schedule to the 1 of 1944 hereinafter referred to as the specified goods from so much of the duty of excise leviable thereon read with any rele vant notification issued under the said sub rule1 of rule 8 and in force for the time being as is in excess of a eighty seven and a half per cent of such duty if produced in any factory which com menced production of the specified goods for the first time earlier than the 1st day of April 1976 and b Seventy five per cent of such duty if produced in any factory which commenced pro duction of the specified 201 goods for the first time on or after the 1st day of April 1976 subject to the conditions that There is no controversy regarding evaluation According to the assessee as well as the department effect has first to be given to the notification dated August 1 1974 and the duty calculated in terms of that notification
There is also no controversy at this stage
The controversy begining thereafter
According to the dapartment thereafter effect has to be given first to the notification dated June 16 1977 and then to the notification dated July 14 1978 where as according to the assessee effect has to be given in the first instance to the notification dated July 14 1978 and then to the notification dated 16 1977
The Department s contention was accepted by the Tribunal
In this appeal Dr LM Singhvi learned counsel for the appellant argued that on principle the effective duty has to be first determina tion by applying the notification dated July 14 1978 first and the duty paid on the inputs should be set off under the notification dated June 16 1977 against the duty determined as payable after applying the notification dated July 14 1978
In support of his argument the learned counsel relied upon a recent judgment of this court in Assistant Collector of Central Excise v Madras Rubber Factory limited Civil Appeal No 3195 of 1979 etc
We are afraid that in the face of the language of the notifications it is not possible to agree with the submission of Dr Singhvi
We have already extracted the notification dated June 16 1977 and July 14 1978
The notification dated July 14 1978 it is to be noticed has super added the words read with any relevant notification issued under the said sub rule1 of Rule 8 and in force for the time being These super added words show conclusively that the notification dealing with exemption to the extent of the duty paid on the inputs which was already in force had to be given effect before giving effect to the notification dated July 14 1978
This was the submission of Shri A Subba Rao learned counsel for the department and it is difficult to see any escape from it
The case upon which reliance was placed by Dr Singhvi does not appear to have any relevance to the question at issue
There the court was concerned with the determination of the assessable value and not with the present question relating to the order of priority in which the notifications granting 202 exemption from duty had to be applied
There what the court decided was that Excise Duty cannot be computed without proper determination of the assessable value namely assessa ble value exclusive of permissible deductions
That princi ple cannot come in aid of the question involved in this appeal
The learned counsel also argued that to give effect first to the notification dealing with exemption to the extent of the duty paid on inputs and thereafter to the notification dated July 14 1978 would mean that the asses see would not be getting full credit for the entire duty paid on the inputs but only to a percentage of it and that there would therefore be double taxation atleast to that extent
There is no general principle that there can be no double taxation  in the levy of Excise Duty
The court may lean in favour of a construction which will avoid double taxation but in the present case there does not appear to be any lean question of construction at all
On the language of the notification dated July 14 1978 only one result can follow
That is the view taken by the Tribunal in the order under appeal
We agree with that view of the matter
The appeal is dismissed with costs
PSS Appeal dismissed


Summary:
By a notification dated August 1 1974 the Central Government in exercise of its powers under sub rule1 of Rule 8 of the Central Excise Rules exempted automobile tyres from excise duty leviable thereon as was in excess of fifty five per cent ad valorem
Another notification issued on June 16 1977 exempted all excisable goods from duty to the extent of the duty already paid on the inputs
A further notification dated July 14 1978 exempted tyres and tubes from so much of the duty leviable thereon read with any relevant notification issued under the said subrule1 of Rule 8 in force for the time being as was in excess of eightyseven and a half per cent of such duty if produced in any factory which commenced production for the first time earlier than the 1st day of April 1976 and seventy five per cent of such duty if produced in any factory which commenced production for the first time on or after the 1st day of April 1976
A dispute arosse in respect of the latter two notifica tion as to which of them was first to be given effect to
The Tribunal accepted the Department s contention that effect had to be given in the first instance to the notifi cation dated June 16 1977 and then to the notification dated July 14 1978
In this appeal it was contended for the appellant that to give effect to the second notification and thereafter to the third notification would mean that the assessee would not be getting full credit for the entire duty paid on the inputs but only a percentage of it and that there would therefore be double taxation at least to that extent
Dismissing the appeal the Court 199 HELD 1
The Tribunal was right in taking the view that effect had to be given first to the notification dated June 16 1977 and then to the notification dated July 14 1978
The words read with any relevant notification issued under the said sub rule 1 of Rule 8 in force for the time being super added by the latter notification show conclusively that the earlier notification dealing with exemption to the extent of the duty paid on the inputs which was already in force had first to be given effect to
201E G Assistant Collector of Central Excise vs Madras Rubber Factory Limited Civil Appeal No 3195 of 1979 distin guished
There is no general principle that there can be no double taxation  in the levy of excise duty
The Court may lean in favour of a construction which will avoid double taxation but in the instant case there does not appear to be any lean question of construction at all
202B C