2000 (10) TMI 863 - AT - Central Excise

Summary

Issues Involved:
1. Interpretation of Notification No. 175/86-C.E. regarding the date from which the benefit of S.S.I. exemption is applicable.
2. Consideration of the plea of time bar against the show cause notice.

Issue-wise Detailed Analysis:

1. Interpretation of Notification No. 175/86-C.E.:

The primary issue revolves around whether the benefit of the S.S.I. exemption under Notification No. 175/86-C.E. should be applicable from the date of issuance of the registration certificate (31-8-1988) or from the date of commencement of production (29-4-1988).

- Appellant's Argument: The appellants argued that the delay in granting the registration should not affect their eligibility for the exemption. They contended that the certificate should relate back to the date of application or at least to the date of commencement of production as mentioned in the certificate.

- Respondent's Argument: The respondent maintained that the benefit of the notification could only be extended to units registered with the competent authority as per the plain reading of the notification. Since the registration date was 31-8-1988, benefits prior to this date could not be extended.

- Tribunal's Observation: The tribunal observed that Notification No. 175/86-C.E. applies to factories registered as S.S.I. units. The benefit cannot be extended to a factory not registered during the relevant period. However, the tribunal agreed that the authorities had not examined the plea for waiver of the registration condition as per Clauses (a) and (b) of para 4 of the notification. Therefore, the matter was fit for remand for further examination.

- Separate Judgment by Member (Judicial): Member (Judicial) disagreed with the above view, citing a Supreme Court judgment in State of U.P. v. Haji Ismail Noor Mohammad & Co. and other precedents. It was argued that the registration certificate, though granted later, should relate back to the date of application or at least the date of commencement of production. The Member (Judicial) emphasized that the delay by the Directorate of Industries should not disadvantage the appellant.

2. Plea of Time Bar Against Show Cause Notice:

- Appellant's Plea: The appellants raised a plea of time bar against the show cause notice received on 29-6-1989.

- Tribunal's Observation: The tribunal noted that the plea of time bar could only be considered for notices under Section 11A proposing a demand of duty. Since the show cause notice in question did not propose any demand of duty but was against the approval of the classification list, the plea of time bar was deemed irrelevant in the present proceedings.

Final Order:

- Third Member's Opinion: The third member agreed with the Member (Judicial), stating that the benefit of the notification should be available from the date of commencement of production. The appellant should not be penalized for the delay in the issuance of the registration certificate by the authorities.

- Majority Opinion: In view of the majority opinion, the benefit of Notification No. 175/86-C.E. was held to be available to the appellants from 29-4-1988, the date of commencement of production. The appeal was allowed with consequential reliefs to the appellants.