2004 (5) TMI 409 - AT - Central Excise

Exemption - Option to avail of exemption under Notification No. 38/97-C.E. and Modvat Scheme

Summary

Issues:
Appeal against denial of exemption under Notification No. 38/97 for classification List No. 11/98-99, requirements for availing exemption under Notification No. 38/97, validity of declaration under Rule 173B, absence of a separate letter of option for exemption, grounds for denial of exemptions, format for exercising the option in writing, supplementary instructions under Rule 233, dismissal of the appeal.

Analysis:
The appeal was filed by the Revenue against the finding and orders of the CCE (Appeals) concerning the denial of exemption under Notification No. 38/97 for classification List No. 11/98-99. The CCE (Appeals) had denied the exemption on the basis that the appellants did not file a letter of option for availing the exemption under the said notification. However, it was observed that the appellants had filed declarations under Rule 173B claiming the exemption earlier. The Member (T) held that the absence of a separate letter of option cannot be a ground for denial of exemptions, especially when the appellants had not departed from the modvat scheme. Thus, the order of the Assistant Commissioner was set aside, and the appeal was allowed.

In the subsequent part of the judgment, it was noted that the appellants had submitted a declaration in the classification list Performa of Rule 173B, which contained all the necessary details and undertakings as required by Notification 38/97. The conditions for opting in writing as per the notification did not specify a particular format for expressing the intention to opt for the exemption. It was further emphasized that the notification and grounds did not mention any requirement for declarations to be made in a specific Performa under Rule 233. Consequently, it was held that there was no merit in the grounds taken, and the impugned order allowing the benefit to be availed was found to be valid. Thus, the appeal was dismissed.

In conclusion, the judgment highlights the importance of compliance with the procedural requirements for availing exemptions under specific notifications. It clarifies that the absence of a separate letter of option does not necessarily invalidate the claim for exemptions if the necessary declarations and undertakings have been made in accordance with the relevant rules and notifications. The judgment also underscores the significance of interpreting the provisions of notifications and rules in a manner that upholds the rights of the appellants to avail benefits under the applicable schemes.