TMI Blog2021 (10) TMI 891X X X X Extracts X X X X X X X X Extracts X X X X ..... For the Opponent(s) : Mr Dhaval D Vyas ORAL ORDER (PER : HONOURABLE MR. JUSTICE RAJENDRA M. SAREEN) 1. This tax appeal was admitted for considering following substantial questions of law: (1) Whether on the facts and in the circumstances of the case the CESTAT was right in dismissing the appeal when the orders challenged before it have travelled beyond show cause notice and were bad in law and were passed in violation of principles of natural justice? (2) Whether, on the facts and in the circumstances of the case, the CESTAT was justified in holding that the benefit of deemed credit under order No.TS/36/94TRU dated 1.3.1994 will not be available to the rerollers whose value of clearances have crossed? 75 lakhs in a particular financial year? (3) Whether on the facts and in the circumstances of the case, the CESTAT was right in holding that whatever interpretation was put on Notification No. 1/93 would affect the availment of the benefit of the deemed credit order No.TS/36/94TRU dated 1.3.1994 ? 2. The order challenged by the appellant- assessee in the present tax appeal passed by CESTAT is rather brief and reads as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be granted. The said notification provided for different slabs for availment of the benefit thereunder; however, such benefit was available in the aggregate, to clearances of ₹ 75,00,000/-. While the benefit of the said notification was available upto a limit of clearance of ₹ 75,00,000/-, for the purpose of being eligible to the benefit thereof, the aggregate value of clearances of all excisable goods for home consumption should not have exceeded ₹ 200 lakhs in the preceding financial year. By the order dated 1st March, 1994 issued in exercise of powers under rule 57G(2) of the rules, the benefit of deemed credit was given to manufacturers of goods falling within the ambit of Notification No.1/93. Thus, to be eligible to the benefit of Notification No.1/93, certain criteria as set out therein had to be satisfied. Such criteria related to the aggregate value of clearances made in the past year. Under Notification No.1/93, the benefit thereunder has been provided till clearances reached 75,00,000/- and thereafter, the normal rate of duty was payable by such manufacturers. The Government of India Order dated 1st March 1994 granting facility of deemed credit, was av ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the Central Boards of Revenue Act, 1963] in this behalf evidencing the payment of duty on such inputs: Provided further that having regard to the period that has elapsed since the duty of excise was imposed on any inputs, the position of demand and supply of the said inputs in the country and any other relevant considerations, the Central Government may direct that with effect from a specified date, all stocks of the said input in the country, except such stocks lying in a factory, customs area [as defined in the Customs Act, 1962] or a warehouse as are clearly recognizable as being nonduty paid, may be deemed to be dutypaid and credit of duty in respect of the said inputs may be allowed at such rate and subject to such conditions as the Central Government may direct, without production of documents evidencing payment of duty. 17. On a plain reading of the second proviso to rule 57G (2) of the rules, it is clear that what the same envisages is that having regard to the circumstances described therein, the Central Government may direct that with effect from a specified date all stocks of inputs (as described therein) as are clearly recognizable as being nonduty paid, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o refer to the contents of Notification No.1/93. By the said notification which has been issued in exercise of powers under section (1) of section 5A of the Central Excise Act, 1944 the Central Government has exempted the excisable goods of the description specified in the Annexure below the notification and falling under the Schedule to the Central Excise Tariff Act, 1985 and cleared for home consumption on or after the 1st day of April in any financial year, by a manufacturer from a factory, which is an undertaking registered with the Director of Industries in any State or the Development Commissioner (Small Scale Industries) as a small scale industry under the provisions of the Industries (Development and Regulation) Act, 1951 by way of three different slabs as provided under sub clauses (a), (b) and (c) to clause (1) thereof. The second proviso to clause (1) of the notification postulates that the aggregate value of clearances of the specified goods in terms of sub-clauses (a), (b) and (c) taken together, shall not exceed rupees seventy five lakhs. Clause (3) of the notification provides that nothing contained in the notification shall apply if the aggregate value of clearances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igibility 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. 23. The above view taken by this court, finds support in various decisions rendered by other High Courts. The Himachal Pradesh High Court in the case of Sood Steel Industrial (P) Ltd. v. Commissioner of Central Excise (supra) has in relation to a similar controversy held thus: 13. In our view, the order of the Larger Bench of the CEGAT is not correct. The benefit of the Notification No.1/93-C.E. is available to any manufacturer whose total clearances in the preceding financial year did not exceed ₹ 2 crores. The deemed credit order clearly states that all concerns availing of exemption under Notification No.1/93- C.E., dated 28-2-1993 will be deemed to have paid duty under Rule 57-I of the Rules and the credit may be allowed to them at the rate fixed without production of any documents evidencing the payment of duty. Any manufacturer whose total clearances did not exceed ₹ 2 crores was entitled to the benefit of exem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 200 lakhs during the preceding financial year and availed full exemption under Notification No.1/93- C.E., dated 28-2-1993 up to 24-12-1994 and thereafter started paying duty. Therefore, Appellant cannot said to be not availing exemption under Notification No.1/93-C.E., dated 28-2- 1993 during the year 1994-95. The Deputy Commissioner of Central Excise recorded factual finding that Appellant satisfied the conditions viz., (i) the inputs were re-rollable materials of steels; (ii) the inputs were purchased from outside and were lying in stock; (iii) the Appellant were re-rollers availing exemption under Notification No.1/93- C.E., dated 28-2-1993 and (iv) the process carried was heating and not melting and that the goods manufactured were classifiable under Chapter 72. When the Deputy Commissioner had recorded such factual finding that the Appellant satisfied the conditions Notification No.1/93- C.E., dated 28-2-1993 and Ministry s Deemed Credit Order TS/36/94-TRU, dated 1-3-1994 and applying the ratio laid down by the Division Bench of Himachal Pradesh High Court in 2009 (241) E.L.T. 186 (H.P.) [Sood Steel Industrial (P) Limited v. Commissioner of Central Excise], we are of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revenue and against the assessee. The Tribunal was not justified in setting aside the Order-in- Appeal passed by the Commissioner (Appeals) without giving any findings on the issue of admissibility of deemed modvat credit after the order dated 1st March, 1994 came to be rescinded with effect from 1st April, 1995. 29. In the light of the above discussion, the tax appeals preferred by the assessees are hereby allowed by quashing and setting aside the impugned orders passed by the Tribunal to the extent the Tribunal has held that the assessees are not entitled to the benefit of the order dated 1st March, 1994 after crossing the aggregate value of clearances of ₹ 75,00,000/-. Tax Appeal No.466 of 2014 is partly allowed by setting aside the impugned order passed by the Tribunal to the extent the Tribunal has allowed the appeal in respect of the benefit of deemed modvat credit of ₹ 5,74,098/- availed by the respondent - assessee on 24th December, 1995. Tax Appeals No.464 and 465 of 2014 are hereby dismissed. 6. In other connected appeals and against the very judgement and order impugned in the present appeal, Patran Steel Industries versus the Customs Excise a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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