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2015 (9) TMI 690 - UTTARAKHAND HIGH COURT

2015 (9) TMI 690 - UTTARAKHAND HIGH COURT - 2015 (323) E.L.T. 46 (Uttarakhand) - SSI Exemption - availing SSI benefit for one unit and paying full rate of duty from another unit simultaneously - Denial of exemption benefit under Notification No. 1/93-CE dated 28.02.1993 - Held that:- A bare reading of the amendment, which was inserted in the early Notification 1/93-CE, appears to suggest that this was done as manufacturers were coming in and out of this exemption. They first used to opt for exem .....

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urer exceeds rupees two crore in the preceding financial year, it cannot claim exemption under the notification. There are other similar provisions with the same goal in mind. The most important and in fact the decisive words in para 2 of the Notification No.1/93-CE is that only such clearances can get exemption where the “aggregate value of the clearances of the specific goods for home consumption” is of a certain value.

The provision in the main Notification No.1/93-CE as well as th .....

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tutes. - manufacturer could not have availed the benefit of exemption under Para (1) of the Notification No. 01/93-CE dated 28.02.1993, since it had opted to full rate of duty in a financial year in relation to its other unit. - Decided in favour of Revenue. - Central Excise Appeal No.04 of 2010 - Dated:- 14-5-2015 - K.M. Joseph, C.J. and Sudhanshu Dhulia, J. Judgment Per: Sudhanshu Dhulia, J. 1. Heard Mr. Shobhit Saharia, Advocate for the appellant and Mr. P.R. Mullick, Advocate, for the respon .....

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Central Excise Rule, 1944] was held to be a just demand by the adjudicating authority, namely, Additional Commissioner, Meerut vide its order dated 28.03.2004. It is this order which was set aside by the Commissioner (Appeals) and later upheld by the CESTAT. 4. Pursuant to the order passed by the High Court of Judicature at Allahabad M/s Dinex Plywood (P) Ltd., Sitapur was amalgamated/merged with the respondent company i.e. M/s Janardhan Plywood Industries Ltd. 13, Gandhi Road, Dehradun. The me .....

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Chapter 44 of the Schedule to the Central Excise Tariff Act, 1985. 6. A declaration was filed by the respondent on 01.04.1996 opting to pay full rate of excise duty in the relation to Unit No. I, while at the same time opting to avail exemption benefit under Notification No. 1/93-CE dated 28.02.1993 as stood amended by Notification No.59/94-CE dated 1st March, 1994 in relation to its Unit No.2. 7. The Revenue, however, gave a show cause notice dated 13.10.1996 to the respondent for recovery of .....

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of the adjudicating authority has been set aside and later in appeal before the CESTAT the appeal has been dismissed, as already referred above. Hence, the present appeal. 8. A Division Bench of this Court has admitted the appeal on following substantial question of law:- whether a manufacture after opting to pay full rate of duty in a financial year in terms of Para 2 (i) of the Notification No. 01/93-CE dated 28.02.1993 as amended, could avail the benefit of exemption under Para 1 of the said .....

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₹ 30 lakhs and concessional duty thereafter in case of S.S.I. (Small Scale Industries) units having a total clearances not exceeding ₹ 2 crores in preceding year. 11. The said notification granted exemption on excisable goods which had an aggregate value up to a certain limit with other riders attached to it as well. This notification was amended on 01.03.1994 by Notification No. 59/94-CE the amendment reads as under:- Notwithstanding the exemption contained in paragraph 1 of this n .....

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alls. 12. The respondent did not exercise the exemption benefit for its Unit No. 1 but exercised its option for exemption as regards Unit No. 2 at Dehradun, ostensibly in terms of the provision in the amended notification. 13. A bare reading of the above amendment, which was inserted in the early Notification 1/93-CE, appears to suggest that this was done as manufacturers were coming in and out of this exemption. They first used to opt for exemption in a financial year and thereafter for other c .....

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he Units i.e. Unit No.1 as well as Unit No.2 will be kept out of the exemption. It is not permissible that a manufacturer exercises his exemption for one Unit and chooses to keep out of it as regards another Unit. This is the appellant s argument given the plain language of the amendment which talks about a manufacturer exercising an option and not a unit or a factory exercising this option. Therefore the appellant would argue that while forgoing exemption in respect to the Unit No. 1, the manuf .....

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el for the respondent Shri Pullack Raj Mullick on the other hand while defending the decision of the Tribunal as well as the Commissioner (Appeals) submits that fiscal laws though to be strictly interpreted, yet where two meanings are possible, the meaning which is beneficial for the assessee has to be adopted. There is nothing in the Notification No. 1/93-CE as well in the amended Notification No. 59/94-CE (the amendments), which debars one unit of a company to exercise option and another to ke .....

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do and the demand of the Revenue is totally unjustified and as it has been upheld by the Commissioner (Appeals) as well as CESTAT. 16. If we go through the Notification No. 1/93-CE and the amended Notification No.59/94-CE, the purpose of these Notifications are obviously to benefit the small scale industries. The limits to these exemptions, the checks and balances in the notifications are for the purposes that only the deserving small scale industries get the benefit out of the notification. 17 .....

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ain value. 18. Para 2 of the notification (No.1/93-CE) speaks of the aggregate value of clearances of the specified goods for home consumption in a financial year , which are by a manufacturer from one or more factories , and should not exceed a particular amount (Rupees thirty lakh, twenty five lakh and ten lakh respectively under different stages of exemption), there is an emphasis on manufacturer and aggregate value . In the notification the two crucial words are manufacturer and aggregate va .....

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tion and the other refraining from claiming this exemption, so that, it can get benefit under the other excise schemes, such as MODVAT Credit, etc. The provision in the main Notification No.1/93-CE as well as the amended Notification No. 59/94 have been placed in order to check this abuse. It is for this reason that we find that once the respondent had exercised to keep out of the exemption for its Sitapur unit, it cannot claim benefit of the notification for its Dehradun unit consequently the d .....

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ation can be made. We are, however, afraid that the exemption as claimed by the respondent cannot be granted to it in the first place. The learned counsel for the respondent Sri P.R. Mullick relying upon the decision of the Hon ble Apex Court in the case of Union of India and others Vs. Wood Papers Ltd. and another, (1990) 4 SCC 256, would submit that an exemption clause should be liberally constructed and full play should be given to it by giving it a wider and liberal meaning. We have gone thr .....

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