2002 (3) TMI 575 - AT - Central Excise

Summary

Issues Involved:
Whether a manufacturer can avail of S.S.I. exemption under Notification No. 8/99-C.E. for some goods and discharge duty liability at normal tariff rate by availing Modvat credit for other goods.

Detailed Analysis:

Issue 1: Interpretation of Notification No. 8/99-C.E.
The appeal questioned whether M/s. Kinjal Electronics Pvt. Ltd. could avail of S.S.I. exemption under Notification No. 8/99-C.E. for specific goods while paying duty at normal tariff rate for other goods by utilizing Modvat credit. The appellant argued that they had opted not to avail of the exemption for certain goods as per the conditions of the Notification.

Issue 2: Legal Precedents and Interpretation of Conditions
The appellant cited legal precedents, including the case of Kamrup Industrial Gases Ltd. v. CCE, to support their argument that the option to not avail of exemption for certain goods does not prevent claiming exemption for others. They also referred to the decision in the case of Franco Italian Co. Pvt. Ltd. v. CCE and Collector v. Vidarbha Beverages to strengthen their position.

Issue 3: Department's Position and Legal Arguments
The Department contended that the Notification did not allow for selecting specific goods for exemption and argued against splitting the exemption for different goods. They relied on the decision in Plasmac Machines Manufacturing Co. Pvt. Ltd. v. CCE to support their stance that excise authorities are not bound by previous classification lists.

Issue 4: Notification Conditions and Manufacturer's Options
The Notification provided the option for a manufacturer to not avail of the exemption but did not specify choosing exemption for some goods and not for others. The Tribunal noted that two separate Notifications were issued - one for exemption and the other for concessional duty, indicating that the exemption under Notification No. 8/99 was subject to the conditions specified in Para 2.

Issue 5: Tribunal's Decision and Referral to Larger Bench
The Tribunal concluded that the manufacturer must opt not to avail of the exemption for all specified goods manufactured by them, rather than selecting specific goods. The Tribunal acknowledged a difference in interpretation from a previous case and referred the matter to a Larger Bench for further consideration.

This detailed analysis of the judgment provides a comprehensive understanding of the legal issues, arguments presented by both parties, relevant legal precedents, and the Tribunal's decision, ensuring a thorough examination of the case.