TMI Blog2018 (1) TMI 1210X X X X Extracts X X X X X X X X Extracts X X X X ..... ss of melting, in the manufacture of goods falling under Chapters 72 and 73 of the Schedule to the Central Excise Tariff Act, 1985, may be allowed at the rate of ₹ 920/- per tonne, without production of documents evidencing the payment of duty. In our view, in view of this Notification dated 1st March, 1994, the appellant was not required to produce the documents evidencing the payment of duty while availing of exemption under the Notification No. 1/93-Central Excises, dated 28th February, 1993. Impugned order set aside - appeal allowed. - First Appeal No. 95 of 2005 - - - Dated:- 29-8-2017 - R.D. Dhanuka and Sunil K. Kotwal, JJ. Shri A.P. Kolte, Advocate, for the Appellant. Shri D.S. Ladda, Advocate, for the Respondent. JUDGMENT [Judgment per : R.D. Dhanuka, J.]. - The present appeal under Section 35G of the Central Excise Act, 1944 (hereinafter referred to as the Act ) arises out of the order dated 12-2-2004 passed by the Customs, Excise and Service Tax Appellate Tribunal, West Regional Bench at Mumbai, (For short the Said Tribunal ), thereby upholding the demand of ₹ 3.73 lakh made by the Superintendent, Central Excise and Customs, Town ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Government issued Notification No. 1/93-C.E., dated 28-2-1993 exempting clearances made by Small Scale Industrial Unit to the extent provided in the said Notification, having clearances not exceeding Rupees Two Crores in the preceding financial year. It is the case of the appellant that the appellant, on the basis of the said Notification, availed the benefit of deemed credit. 7. On 18-4-1995 the Superintendent of Central Excise, Town-I, Range Ahmednagar, issued show cause notice to the appellant. In the said show cause notice, it was stated that the appellant was availing facility of Modvat Credit under Rules 57A and 57G of Central Excise Rules, 1944, and had been paying Central Excise Duty at concessional rate from the beginning in view of the Notification No. 1/93-C.E., dated 28-2-1993, as amended from time to time and was also availing facility of deemed credit at the rate of ₹ 920 per Metric Tonne without producing duty paying documents, on the input/raw material i.e. re-rollable scrap, which was received by the appellant from scrap dealer i.e. M/s. Viren and Company, Ahmednagar. 8. It was further stated that the Government of India had issued an order F. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntral Excise Rules and also imposed penalty of ₹ 30,000/- on the appellant under Rule 173Q of the said Central Excise Rules. The learned Additional Commissioner held that the Government of India by an order dated 1-3-1994 specifically laid down that deemed credit facility was available only to such Small Scale Industrial Units which were availing of exemption on Notification No. 1/93, dated 28-2-1993, making it clear that after crossing the clearances of ₹ 75,00,000/-, Small Scale Units no longer enjoy concessional rate of duty. It was held that the appellant will have to pay full rate of duty and was no longer exempted under Notification No. 1/93. It was held that only such units, which were availing of exemptions under Notification No. 1/93, dated 28-2-1993, were eligible to avail the facility of the deemed credit. The appellant had ceased to avail of exemption under the said Notification after crossing clearances value of ₹ 75,00,000/- though they continued to be Small Scale Unit as their total value of clearances was below Rupees Two Crore. It is held that since the appellant continued to avail Modvat Credit in violation of Central Excise Rules, they were liab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant herein partly thereby setting aside the order passed by the Commissioner of Central Excise and Customs imposing penalty of ₹ 30,000/-. 16. Shri Kolte, learned Counsel for the appellant, submits that aggregate value of clearances of all excisable goods made by the appellant during the relevant preceding financial year i.e. 1993-1994 did not exceed Rs. two crores. It is submitted that the order dated 1st March, 1994 issued by the Government of India, providing the Deemed Credit Facility had identified the categories of manufacturers, who were eligible to the benefit of the exemption under the said Notification taking into consideration difficulties of the category of manufacturers i.e. Small Scale Re-rolling Units in obtaining the raw materials directly from the primary manufacturers under the cover of gate passes, etc. and exempting them from the requirement of production of such duty paying documents, such as gate passes, etc., evidencing payment of duty in respect of their inputs in question. 17. Learned Counsel for the appellant placed reliance on the following judgments of various High Courts in support of his submissions: (I) Vinubhai Steel Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that appellant has not produced any document evidencing the payment of duty. The learned Counsel could not seriously dispute the law laid down by the four High Courts in the aforesaid four judgments. 21. The respondent has not disputed that the appellant was registered as Small Scale Unit holding registration certificate dated 20th September, 1994 and had been availing Modvat Credit Facility in respect of re-rolling steel inputs used by the appellant in the manufacture of their final products and appellant had availed the exemption limits as envisaged by Notification No. 1/93-C.E., dated 28-2-1993 and availed Deemed Credit at the rate of ₹ 920/- per metric tonne on the said re-rollable steel scrap as per the said Notification dated 1st March, 1994. The value of the clearances of the appellant during the financial year 1994-1995 was at ₹ 1,29,88,185.18, which was admittedly below the limit of Rs. two crores, specified in the Notification dated 28th February, 1993. 22. The Larger Bench of the CEGAT, Northern Bench, New Delhi, in case of Digambar Foundary, (supra), has reversed the view taken by the Tribunal in the case of Collector of Central Excise v. Sri Venkatesw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th February, 1993 during the year 1994-1995. The Madras High Court accordingly was pleased to set aside order of the Tribunal and decided the said appeal in favour of the assessee. 25. The Gujarat High Court in case of Vinubhai Steel Co. Pvt. Ltd., (supra), considered the identical facts and after following the judgment of Himachal Pradesh High Court in case of Sood Steel Industrial Pvt. Ltd., (supra), judgment of Madras High Court in case of Ganesh Steels v. CESTAT (supra) and the judgment of Karnataka High Court in case of Pashupati Steels v. Commissioner of Central Excise, Bengalore - 2012 (278) E.L.T. 59 (Kar.), allowed the Tax appeal preferred by the assessee and was pleased to set aside the impugned order of the Tribunal to the extent, the Tribunal had held that the assessees were not entitled to the benefit of order dated 1st March, 1994 after crossing the aggregate value of clearances of ₹ 75,00,000/-. The Gujarat High Court also considered the Government of India s order dated 1st March, 1994 and held that the Government, taking into consideration the ground realities in regard to purchase of material by re-rollers from open market, by virtue of such order, had ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3-Central Excises, dated 28th February, 1993. Our view is also supported by the view taken by the Gujarat High Court in case of Vinubhai Steel Co. Pvt. Ltd. (supra). 29. In our view, the views expressed by the aforesaid four High Courts apply to the facts of this case. We are in agreement with the views expressed by the aforesaid four High Courts. 30. In our view, the impugned order passed by the Customs, Excise and Service Tax Appellate Tribunal, West Regional Bench at Mumbai, on 12th February, 2004, in so far as demand of ₹ 3.73 lacs is upheld, is concerned, is contrary to the law laid down by the aforesaid four judgments, by which the judgment of Larger Bench of the Tribunal in the case of Digambar Foundary, (supra), has been set aside. Any manufacturer satisfying the conditions under the Notification No. 1/93-C.E. and whose total clearances did not exceed Rs. two crores, is entitled to the benefit of exemption under the said Notification No. 1/93-C.E. By Trade Note, the Central Government could not have restricted the exemption only to those manufacturers whose clearances had not exceeded ₹ 75,00,000/-, contrary to the Deemed Credit Order issued by the Ministr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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