2004 (1) TMI 545 - AT - Central Excise

Issues Involved:
1. Eligibility date for the benefit of Notification No. 1/93-C.E.
2. Computation of the value of clearances for concessional duty.

Issue-wise Detailed Analysis:

1. Eligibility Date for the Benefit of Notification No. 1/93-C.E.:

The respondents are manufacturers of texturised/crimped yarn under Chapter heading 54.03. The Small Scale Notification No. 1/93, dated 28-2-93, was amended by Notification No. 90/94, dated 25-4-94, to include these goods for S.S.I benefit. Further, Rule 56A was deleted, and Modvat benefit was extended to the product covered by Chapter heading 54.03 via Notification No. 24/94, dated 20-5-94.

The Commissioner (Appeals) held that the concessional rate of duty was available from June 1994, post-filing of the classification list. The lower authority's computation from 1-4-94 was deemed incorrect since the goods became specified only from 25-4-94. The Commissioner (Appeals) ruled that the benefit was available from 20-5-94, the date when the goods were recognized as specified for Modvat credit purposes.

The Tribunal referenced the Gujarat High Court's decision in the case of Dhanlaxmi Texturisers, which declared that the benefit of Notification No. 1/93 was available from 20-5-94. Thus, the Tribunal held that the benefit of the notification is available from 20-5-94 and should be computed from the date the assessees opted for the exemption in 1994-95, specifically from 17th June 94.

2. Computation of the Value of Clearances for Concessional Duty:

The core issue was whether the clearances should be computed from 1-4-94, the beginning of the financial year, or from a later date when the goods became specified.

Member (Judicial) held that the computation should start from the date the respondents opted for the exemption, citing the Gujarat High Court's ruling. Member (Technical) disagreed, referencing the Larger Bench decision in CCE, Coimbatore v. Marutham Textiles (P) Ltd., which stated that the computation should start from 25-4-94, the date the goods became specified.

The points of difference were referred to a third member, who concurred with Member (Judicial), emphasizing that duty paid from 1-4-94 to 19-5-94 should not be counted for the first clearance slab under Notification No. 1/93-C.E. The third member supported the view that the benefit should be computed from the date the assessees opted for the exemption, aligning with the Gujarat High Court's decision in Dhanlakshmi Texturisers.

Majority Order:

The majority held that the benefit of Notification No. 1/93, dated 28-2-93, as amended, is available to the assessees from 20-5-94. The value of clearances for concessional duty should be computed from the date the assessees opted for the exemption in 1994-95. The appeals were disposed of accordingly.

Conclusion:

The judgment resolved that the benefit of Notification No. 1/93 is applicable from 20-5-94, and the value of clearances should be computed from the date the assessees opted for exemption in the financial year 1994-95.

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