1999 (1) TMI 498 - AT - Central Excise

Summary

Issues: Interpretation of Notification 175/86-C.E. for availing exemption benefits for goods manufactured in a newly set up factory without SSI registration certificate.

Analysis:
1. The primary issue in this case revolved around the interpretation of Notification 175/86-C.E. and whether the benefit of the notification would be available to goods manufactured in a factory without a valid SSI registration certificate. The appellants had an existing factory registered with SSI authorities and were availing benefits under the notification. They set up a new factory without a separate SSI registration certificate, leading to a dispute with the Revenue regarding the eligibility of the new factory for the exemption under the notification.

2. The crux of the dispute lay in the application of Para 4 of Notification 175/86-C.E. which required registration of a factory with SSI authorities for availing the exemption benefits. The proviso to Para 4 provided relaxation under certain conditions, including clause (b) which exempted a manufacturer who had been availing the exemption under the notification in the preceding financial year. The Revenue contended that both the manufacturer and the factory needed to avail the exemption in the preceding year, which the new factory did not fulfill.

3. The learned Consultant for the appellant argued that clause (b) of the proviso to Para 4 focused on the manufacturer's fulfillment of the notification requirements, not the factory's independent registration status. Citing precedents like Accura Industries case, it was contended that as long as the manufacturer had availed the exemption in the previous year for a different factory, the benefit should extend to the new factory. The Tribunal's decision in similar cases supported this interpretation, emphasizing the distinction between clauses (a) and (b) of Para 4.

4. After considering the arguments from both sides, the Tribunal agreed with the appellant's interpretation. The Tribunal found the situation analogous to previous cases like Accura Industries and held that clause (b) of the proviso focused on the manufacturer's compliance, not the factory's separate registration status. As the manufacturer had met the conditions of the notification by availing the exemption in the previous year, the benefit could not be denied to the new factory. Consequently, the impugned order was set aside, and the appeals were allowed in favor of the appellants, granting them consequential relief.

This detailed analysis of the judgment highlights the key legal interpretations and arguments presented by both parties, leading to the Tribunal's decision in favor of the appellant based on the specific provisions and conditions outlined in Notification 175/86-C.E.