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2015 (3) TMI 746 - HC - Central ExciseDeemed credit denied to the re-rollers availing SSI Exemption - Benefit of Notification No.1/93-CE - Whether the re-rollers whose aggregate value of clearances in the current financial year had exceeded ₹ 75,00,000/- and who were paying full rate of central excise duty as applicable to re-rollers in respect of clearances exceeding ₹ 75,00,000/- in the current financial year, could still avail of the benefit of the Government of India Order - Held that:- From the heading of the notification it is clear that the benefit thereunder is available to S.S.I. units provided they have not exceeded clearances of rupees two crores in the preceding financial year. What is stated in the heading is provided under clause (3) of the notification which limits the entitlement to the benefit of the notification to S.S.I. units, the aggregate value of whose clearances have not exceeded rupees two hundred lakhs. In effect and substance, clause (3) of the notification provides for the eligibility criteria for getting the benefit of the said notification and accordingly provides that such S.S.I. units whose aggregate clearances in the preceding financial year have not exceeded two hundred lakhs shall be eligible to get the benefit of the said notification. Assigning a plain meaning to the language used in the Government Order dated 1st March, 1994, the rerollers who are eligible to get the benefit of the Notification No.1/93 and are availing exemption thereunder are eligible to get the benefit of deemed credit thereunder. Provision whereby the benefit of notification No.1/93 is limited to the aggregate value of clearances of specified goods to the extent of rupees seventy five lakhs relates to the extent of benefit that can be claimed under the said notification. However, the same is not an eligibility criteria for availing of the benefit of the said notification. A reroller who avails of the benefit of Notification No.1/93 is by dint of such fact eligible for the benefit of deemed credit under the Order dated 1st March, 1994 and the benefit under the said order is not qualified by the limit provided for availment of the benefit of Notification No.1/93. The decision of the Tribunal in the case of Digambar Foundary v. Commissioner of Central Excise (supra), whereby it is held that the eligibility to avail of the benefit under the order would be only to the extent the clearances do not exceed ₹ 75,00,000/-, is, therefore, an incorrect interpretation of the Order dated 1st March, 1994 as well as the Notification No.1/93. - Tribunal was not justified in holding that the benefit of deemed credit available under Order TS/36/94--TRU dated 1st March, 1994 passed by the Central Government in exercise of powers conferred under rule 57G(2) of the erstwhile Central Excise Rules, 1994 could be denied to the re-rollers whose value of clearances have crossed ₹ 75,00,000/- in a particular financial year for the purposes of exemption Notification No.1/93 on the ground that such re-rollers could not be said to be availing of exemption under the Notification No.1/93 dated 28-2-1993. Respondent M/s Sonthalia Steel Re-Rolling Mills had availed the benefit of deemed modvat credit of ₹ 5,74,098/- on 24th December, 1995 for input lying in stock, after the Notification:TS/36/94-TRU dated 1st March, 1994 came to be rescinded vide Notification:TS/8/95-Tru.-CE (NT) dated 16th March, 1995 whereby the Central Government in exercise of powers under the second proviso to sub-rule (2) of rule 57G of the rules rescinded the order dated 1st March, 1994 with effect from 1st April, 1995. Thus, to the extent M/s Sonthalia Steel Re-Rolling Mills had availed the benefit of the order dated 1st March, 1994 after it came to be rescinded with effect from 1st April, 1995, it was not entitled to such benefit. - Decided partly in favour of assessee.
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