2003 (3) TMI 569 - AT - Central Excise

Summary

Issues:
1. Interpretation of notification 1/93 amendment dated 25-4-1994 regarding exemption for manufacturers of crimped and textured yarn.
2. Determination of the date for calculating clearances under the notification.
3. Effect of Modvat credit availability on the exemption.
4. Applicability of previous Tribunal decisions on the issue.
5. Consideration of manufacturer's option not to avail of the exemption.
6. Requantification of duty based on the judgment.

Analysis:
1. The appeals revolve around the amendment to notification 1/93 on 25-4-1994, granting exemption to manufacturers of crimped and textured yarn. Manufacturers filed declarations post-amendment to avail of the exemption. The department issued notices considering clearances made from 1st April, 1994. The Assistant Commissioner held that clearances post-amendment should be included in determining the value of first clearances, leading to duty confirmation.

2. Assessees contended before the Commissioner (Appeals) that clearances should be computed from the date of opting for exemption, post-amendment. The Commissioner noted Modvat credit availability from 20-5-1994, stating that prior clearances couldn't be included for exemption calculation. The Commissioner allowed the appeals based on this reasoning.

3. Another Commissioner (Appeals) held that the date of goods notification determines clearances. The department appealed against one order, and the assessees against the other. Assessees relied on previous Tribunal decisions emphasizing the date of opting for exemption for clearance calculation.

4. The Tribunal analyzed the previous decisions cited by the assessees and emphasized that the date of notification publication in the Official Gazette determines the exemption's effect. The Tribunal rejected the argument that clearances made before opting for exemption should not be considered, stating that the intention of the assessee doesn't affect exemption applicability.

5. The notification allowed manufacturers to opt not to avail of the exemption, affecting subsequent clearances. The Tribunal clarified that the notification binds a manufacturer until they choose not to be covered by it. Previous decisions misinterpreted this provision, leading to incorrect conclusions.

6. The Tribunal concluded that previous decisions cited by the assessees were not applicable to the current case. The benefit of exemption was deemed effective from the date of goods clearance, i.e., 25-4-1994. The Tribunal remanded the matter for duty requantification based on the Commissioner (Appeals) order, allowing the appeals and disposing of them accordingly.