TMI Blog1996 (8) TMI 194X X X X Extracts X X X X X X X X Extracts X X X X ..... f exemption under Notification No. 175/86-C.E., dated 1-3-1986 as amended. They were served with a show cause notice alleging that declaration made by the appellants in regard to Small Scale Industry status was wrong as they were ancillary unit to M/s. H.M.T. Ltd., Pinjore and their investment in plant and machinery as on 31-3-1986 was more than 35 lakhs. Since the value of the investment in plant and machinery was more than Rs. 35 lakhs they ceased to be S.S.I. unit from 31-3-1986 and their S.S.I.registration dated 19-3-1980 became invalid in view of the Directorate s letter dated 8-1-1979 intimating that the unit was ancillary to M/s. H.M.T. Ltd., Pinjore. Consequent upon initiation of proceedings against the appellants, Collector in his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll scale Industry. He also submitted that all facts were known to the department. In the classification list they had clearly indicated that their investment in plant and machinery less than Rs. 45 lakhs. This apart, the investment in plant and machinery is not a determining factor under Notification No. 175/86. Classification lists had been submitted. RT 12 Returns were regularly assessed and there was no suppression to justify the extended period under Section 11A for sustaining the demand. 2.2 In support of his case he cited the cases reported in 1993 (67) E.L.T. 721, 1991 (54) E.L.T. 153 (Tribunal), 1994 (74) E.L.T. 9 (SC) and 1988 (38) E.L.T. 741 (SC). 3. Arguing for the Revenue the Ld. D.R. submitted that Industrial Development Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imit at the time). The letter also clarifies that the intention of the Government in providing the necessary relaxation from Rs. 10 lakhs to Rs. 15 lakhs in the capital investment in the scale of small ancillary units was to make them competent units to cater to stringent requirements of quality expected from them by the parent units through installation of costly and sophisticated machinery and makes it clear that since the ancillary units continue to maintain their small scale status even though they cross capital investment Rs. 10 lakhs in the case of ordinary small scale unit, they should be entitled to receive the same concession and exemption which are available to the normal scale unit. 4.2 This makes it clear that ancillary uni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... small scale units include small scale ancillary industry not exceeding specified investment in plant and machinery. This apart, the fact is that Notification No. 175/86 does not contain any requirement of investment in plant and machinery. 6. In view of this, we are of the view that small scale unit exemption cannot be denied to the appellants mainly on the ground that capital investment in plant and machinery was more than Rs. 35 lakhs. We also note from classification lists placed at page 95 and 96 of the appeal papers that they had declared that they are having S.S.I. Certificate dated 19-2-1980 and the plant and machinery cost is less than Rs. 45 lakhs. The exemption cannot be denied to them on the ground that the investment in plant ..... X X X X Extracts X X X X X X X X Extracts X X X X
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