TMI Blog2017 (9) TMI 275X X X X Extracts X X X X X X X X Extracts X X X X ..... it was revealed that the appellant has assessed their Central Excise duty at the normal rate of 16%, after availing benefit of SSI Notification No.9/2003-CE dated 01.03.2003. As per the said notification, the exemption is subject to certain conditions, which includes exercising option in writing to the jurisdictional Assistant Commissioner/Deputy Commissioner with copy to the Superintendent of Central Excise giving certain details. The appellant has not produced any evidence regarding filing of such option. Therefore, it was alleged that appellant is not eligible to avail benefit of said notification as they have not complied with the conditions. In that circumstances, show cause notice was issued to demand differential duty along with interest and to impose penalty on the appellant. The matter was adjudicated, duty was demanded along with interest and penalty was imposed. On appeal before the Id. Commissioner (Appeals), Id. Commissioner (Appeals) confirmed the demands. Aggrieved from the said order, the appellant is before us. 3. The Id. Counsel for the appellant submits that mere non-filing of declarations by the appellant cannot be fatal for the appellant to deny exemption un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Limited (supra), observed as follows:- 10. An exemption notification should be read literally. A person claiming benefit of an exemption notification must show that he satisfies the eligibility criteria. Once, however, it is found that the exemption notification is applicable to the case of the assessee, the same should be construed liberally. 12. A notification like any other provision of a statute must be construed having regard to the purpose and object it seeks to achieve. For the aforementioned purpose, the statutory scheme in terms whereof such a notification has been issued should also be taken into consideration. 20. We, as noticed hereinbefore, have no quarrel with the proposition that exemption notification should be construed strictly which means that benefit thereof should not be granted to one, who is not entitled therefore. But it is also true that those who are entitled to the benefit cannot be deprived therefrom by taking recourse to the doctrine of narrow interpretation simplicitor, although the purpose and object thereof would be defeated thereby. In Kartar Rolling Mills v. Commissioner of Central Excise. New Delhi [2006 (197) E. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and interpreted in the context of the process of soap manufacture. There are no words in the notification to restrict it only to cases where rice bran oil is directly used in the factory claiming exemption and to exclude cases where soap is made by using rice bran fatty acid derived from rice bran oil. The whole purpose and object of the notification is to encourage the utilisation of rice bran oil in the process of manufacture of soap in preference to various other kinds of oil (mainly edible oils) used in such manufacture and this should not be defeated by an unduly narrow interpretation of the language of the notification even when it is clear that rice bran oil can be used for manufacture of soap only after its conversion into fatty acid or hydrogenated oil. From the above, it can be seen that the Hon'ble Apex Court has held that the assessee cannot be deprived of the benefits by taking recourse to the doctrine of narrow interpretation simplicitor, thereby the purpose and object thereof would be defeated. We further find that in the similar facts, in the case of Kanodia Polychem (P) Limited (supra), this Tribunal has held as under:- 4. Having considered t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be withdrawn for the remaining part of the financial year. The declaration requires that following information is provided:- (a) name and address of the manufacturer; (b) location/locations of factory/factories; (c) description of inputs used in manufacture of specified goods; (d) description of specified goods produced; (e) date from which option under this notification has been exercised; (f) aggregate value of clearances of specified goods (excluding the value of clearances referred to in para 3 of this notification) till the date of exercising the option; 10. In this context, it would be pertinent to refer to the case of CCE, New Delhi Vs. Hari Chand Shri Gopal and others - 2010 (260) ELT 3 (SC), wherein the Constitution Bench of the Hon'ble Supreme Court considered the matter of exemption under Notification No.121/94-CE and also the pre-conditions for entitlement to avail such exemption. While deciding the said matter, Hon'ble Apex Court held that the Tribunal has committed an error in overlooking the object and purpose of the procedure laid down in Chapter X. It was also held that detailed procedures have been laid down in Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on No.09/2003-CE has been fully analyzed by this Tribunal in its judgment in the case of Surat Metallics Pvt. Ltd. Vs. CCD ST, Surat - 2016 (343) ELT 1099 (Tri. - Ahmd.) in which it was held as below:- 6 A plain reading of the said notification, particularly the condition in clause 2, it is clear that the assessee-manufacturer requires to exercise their option to avail exemption under this notification, i.e., to pay duty at 60% of the normal rate of duty at the beginning of the financial year itself and the option once exercised, cannot be changed in the same financial year. Needless to emphasize that the condition to exercise the option is the basis for availing the benefit of the exemption notification, and therefore, ought to be complied with so as to be eligible for the benefit of the said notification. The condition 2 is mandatory one is further clear from a reading of sub-clause (iii) along with the illustrations enumerated thereunder. Therefore, the said condition 2 cannot be designated as a mere procedural one and to avail the benefit of the notification need not be fulfilled. Recently, the Hon'ble Supreme Court, in the case of Honda Siel Power Products Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otification are completely different. As per the Notification, the option is mandated to be filed before the first clearance and also it cannot be changed before the end of the financial year while ER-3 returns is a quarterly returns giving the details of inputs, raw materials and Cenvat Credit etc. Hence, substituting ER-3 returns for the option/declaration does not in any way meet the purpose and intent of the mandatory and substantive requirements of clause 2(i) and 2(ii) of the notification. 14. Following the above judgments of Hon'ble Supreme Court in the case of CCE, New Delhi Vs. Hari Chand Shri Gopal and others (Supra) and the Tribunal judgment in the case of Surat Metallics Pvt. Ltd. Vs. CCE ST, Surat (supra), I find that there is no merit in the appeal filed by the appellant and accordingly the same is dismissed. Devender in Member (Technical) DIFFERENCE OF OPINION As there are divergent views of the Members, therefore, the matter is referred to the Hon'ble President to appoint third Member to resolve the following points of difference of opinion:- Whether the Member (Judicial) is correct in relying on the decisions in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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