2002 (5) TMI 679 - AT - Central Excise

Summary

Issues:
1. Interpretation of eligibility for deemed credit under M.F. (D.R.) Order TS/36/94-TRU after crossing the Rs. 75 lakhs limit for SSI Units.

Analysis:
The appeals before the Appellate Tribunal CEGAT, Chennai involved a common impugned order-in-appeal, and the issue at hand was whether SSI Units remain eligible for deemed credit under M.F. (D.R.) Order TS/36/94-TRU after crossing the Rs. 75 lakhs limit and starting to pay duty at the full rate. The appellant's counsel argued that a previous decision by the Tribunal supported the continued eligibility of SSI Units for deemed credit even after crossing the limit. On the other hand, the respondent contended that once a unit crosses the limit and starts paying duty, it no longer remains an SSI Unit for the purpose of availing benefits. The respondent emphasized that the deemed credit facility is not available to units paying normal duty, making it discriminatory to extend the credit to SSI Units post the Rs. 75 lakhs threshold.

The Tribunal considered the arguments presented by both sides and referred to a previous decision involving similar issues. The Tribunal highlighted that the eligibility for deemed credit is linked to manufacturers availing the benefits of Notification No. 1/93 and continuing to operate under this notification. The Tribunal's previous decision emphasized that the facility is specifically available to categories of assessees satisfying the criteria set out in the notification, especially concerning the aggregate value of clearances and the nature of goods manufactured. The Tribunal concluded that SSI Units, even after crossing the Rs. 75 lakhs limit and paying duty at the full rate, can continue to be eligible for deemed credit under M.F. (D.R.) Order TS/36/94-TRU, as per the Ministry of Finance order issued under Rule 57G(2).

In alignment with the previous decision and the interpretation of the eligibility criteria, the Tribunal allowed the appeals of the assessee, affirming that SSI Units remain entitled to deemed credit even after surpassing the Rs. 75 lakhs limit and commencing duty payments at the full rate. The judgment emphasized the continuity of eligibility based on the specific criteria outlined in the relevant notification and the Ministry of Finance order, ensuring that SSI Units can avail of the deemed credit facility under the prescribed conditions.