2000 (10) TMI 839 - AT - Central Excise

Summary

Issues Involved:
1. Eligibility for benefit under Notification 175/86-C.E.
2. Applicability of the date of SSI registration certificate issuance.
3. Relevance of the Supreme Court ruling in State of U.P. v. Haji Ismail Noor Mohammad.
4. Assessment of Central Excise duty based on SSI registration status.

Detailed Analysis:

1. Eligibility for Benefit under Notification 175/86-C.E.:
The appellants commenced manufacturing excisable goods on 9-8-1989 and cleared goods worth Rs. 7,67,199.63 between 9-8-1989 and 22-10-1989. They were issued an SSI registration certificate on 27-10-1989. The authorities felt that the appellants had evaded duty of Rs. 1,20,833.94 since they were not registered as an SSI unit during the period of clearance and thus not eligible for the benefit of Notification 175/86-C.E.

2. Applicability of the Date of SSI Registration Certificate Issuance:
The appellants argued that the registration certificate should be deemed effective from 5-9-1989, the date they applied for it, citing the Supreme Court's ruling in State of U.P. v. Haji Ismail Noor Mohammad. The lower authorities, however, confirmed the duty demand based on the actual issuance date of the SSI certificate.

3. Relevance of the Supreme Court Ruling in State of U.P. v. Haji Ismail Noor Mohammad:
The appellants relied on the Supreme Court ruling, which held that the benefit of a recognition certificate should be available from the date of application, not the date of issuance. However, the respondent argued that this ruling was inapplicable to Central Excise duty assessments, which require contemporaneous registration at the time of goods removal.

4. Assessment of Central Excise Duty Based on SSI Registration Status:
The Tribunal examined whether the ruling in Haji Ismail Noor Mohammad could be applied to the Central Excise context. It was noted that under the Central Excise Rules, duty is payable at the time of removal of goods, and Notification 175/86-C.E. requires SSI registration at that time. Since the appellants were unregistered during the relevant period, they were liable for duty on the clearances.

Separate Judgments:

Member (Technical):
The Member (Technical) held that the Apex Court's ruling in Haji Ismail Noor Mohammad did not apply to the Central Excise context. The duty demand was upheld as the appellants were not registered at the time of clearance.

Member (Judicial):
The Member (Judicial) disagreed, citing the Supreme Court ruling and guidelines from the Directorate of Industries, which stated that permanent registration is valid from the date of production commencement. The benefit of Notification 175/86-C.E. was deemed applicable from the date of application for registration.

Third Member (Technical):
The Third Member (Technical) agreed with the Member (Judicial), emphasizing that the benefit should accrue from the date of application to avoid penalizing the appellant for administrative delays. The appeal was allowed, extending the benefit of Notification 175/86-C.E. from the date of application.

Final Order:
In view of the majority opinion, the appeal was allowed, and the benefit of Notification 175/86-C.E. was extended to the appellants, setting aside the impugned order.