2003 (12) TMI 400 - AT - Central Excise

Summary

Issues:
1. Availing of S.S.I. exemption at different units.

Analysis:

The appeal filed by M/s. Polyinks Pvt. Ltd. raised the issue of whether they could avail the Small Scale Industries (S.S.I.) exemption at their unit in Faridabad while not availing the same exemption for goods manufactured at their unit in Hyderabad. The Appellate Tribunal considered the arguments presented by both parties. The appellant's representative highlighted that the company operated two factories in Faridabad and Hyderabad, producing various goods, and met the conditions of Notification No. 1/93-C.E. for both units. To simplify administrative processes and avoid exceeding the clearance value threshold, they opted to claim exemption under the said notification for goods cleared from the Faridabad factory by paying concessional Central Excise duty, while paying normal duty for goods from the Hyderabad unit. Reference was made to a previous Tribunal decision in the case of CCE, Ludhiana v. Munjal Gases, which was deemed relevant to the current issue.

The Tribunal acknowledged the settled position in the case of Munjal Gases, where it was established that availing Modvat credit at one unit did not disqualify a manufacturer from claiming exemption from duty payment at another unit. The specific wording of "by a manufacturer, from one or more factories" in Notification No. 1/93-C.E. for calculating clearances did not prohibit the simultaneous use of exemption and Modvat credit across different units. The Tribunal noted that this issue had already been decided in favor of the respondents in a previous case, M/s. Munjal Gases v. CCE, Chandigarh, and there was no indication of any reversal by a higher authority. Consequently, the Tribunal found no merit in the Revenue's appeal and rejected it, following the precedent set in the Munjal Gases case.

In line with the reasoning and decision of the Munjal Gases case, the Tribunal overturned the impugned order and allowed the appeal filed by M/s. Polyinks Pvt. Ltd. This ruling clarified that the company could indeed avail the S.S.I. exemption at their Faridabad unit while not doing so for goods manufactured at their Hyderabad unit, based on the established legal interpretation and precedent.