TMI Blog1989 (5) TMI 167X X X X Extracts X X X X X X X X Extracts X X X X ..... res, they were not entitled to the benefit of duty exemption under Central Excise Notification No. 175/86, dated 1-3-1986. It was further alleged that since the Kanpur unit had, during 1987-88, availed itself of MODVAT credit of duty paid on inputs, the Kharia cement unit was not entitled to full exemption from duty on first clearances up to Rs. 15 lakhs under clause (1)(a)(ii) of Notification No. 175/86. The Kharia unit could avail itself of only partial exemption on first clearances up to an aggregate value not exceeding Rs. 75 lakhs as per clause (1)(a)(i) and (1)(b) of the said notification. It was alleged that the amount of duty thus evaded by the Kharia unit worked out to Rs. 38,469 during the period from 1-3-1986 to 24-3-1986, Rs. 9,38,301.20 during 1986-87 and Rs. 1,93,354.60 during 1987-88 (up to September, 1987). In all, the duty in respect of the Kharia unit was Rs. 11,70,124.80 and that in respect of the Kanpur unit Rs. 6,73,070.16. The appellants deposited a total sum of Rs. 9,76,771/-in a number of instalments, some of them preceding the issue of the show cause notice and the others following it, but all prior to the date of the adjudication order. 3. On the issue w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on on cement cleared by it in 1987-88 up to a value of Rs. 15 lakhs since the Kanpur unit had availed itself of the MODVAT credit facility. 8. We have heard Shri M.C. Bhandare, Counsel for the appellants and Shri A.S. Sunder Rajan, DR, for the respondent-Collector. We have also perused the record. 9. Shri Bhandare, learned Counsel for the appellants, drew our attention to sub-clauses (i) and (ii) of clause (a) of para 1 of Notification No. 175/86 reading as follows :- (a) in the case of the first clearances of the specified goods up to an aggregate value not exceeding rupees seven and a half lakhs, (i) in a case where a manufacturer avails of the credit of duty paid on inputs used in the manufacture of the specified goods under Rule 57A of the said Rules, from so much of the duty of excise leviable thereon which is specified in the said Schedule [read with any relevant notification issued under sub-rule (1) of Rule 8 of the said Rules and in force for the time being] as is equivalent to an amount calculated at the rate of 75% of such duty, or an amount calculated at the rate of 10% ad valorem, whichever is higher; (ii) in any other case from the whole of the duty of exci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion between manufacturers and factories. The supposed intentions would not be relevant in construing the terms of the notification. He further submitted that clauses (a)(i) and (a)(ii) of para 1 of the notification were not mutually exclusive. The option was in respect of the manufacturer and not in respect of the goods. Relying on the reasonsing adopted by the Collector, Shri Sunder Rajan prayed that the appeal should be dismissed. 11. We have carefully considered the submissions of both sides and perused the record. 12. The relevant portions of the notification in question have been already set out. Clause (a)(i) sets out the extent of exemption in the case of a manufacturer who avails himself of the facility of utilisation of input duly credit under Central Excise Rule 57A. Sub-clause (ii) provides that in any other case (which would necessarily mean in the case of a manufacturer who does not avail himself of the said input duty credit availment facility), the extent of exemption shall be the whole of the duty of excise leviable on the first clearances of the specified goods up to an aggregate value not exceeding Rs. 7.5 lakhs. Now a manufacturer may have one factory or may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o not find any force in this contention. Para 4 of the notification-provides that the exemption contained in the notification shall be applicable only to factories which are registered with the Director of Industries or the Development Commissioner (Small Scale Industries) as a small scale industry under the provisions of the Industries (Development and Regulations) Act, 1951. It further provides that this restriction shall not be applicable inter alia in a case where a manufacturer had been availing himself of the exemption contained in any of the notifications specified in the paragraph during the preceding financial year. The two notifications referred to by the Counsel are listed in the paragraph. The purport of this paragraph appears to be that the requirement of registration with the Director of Industries or the Development Commissioner as a small scale industry is waived in the case of factories which have been enjoying the benefit of the listed notifications. There is no finding in the Collector s order that the mischief of this paragraph is attracted in the present case. We do not see the relevance of the reference to the two Notifications No. 77/85 and 85/85. 14. The C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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