2005 (3) TMI 596 - AT - Central Excise

Summary

Issues involved:
Whether a company can avail exemption under a small sale exemption notification for goods manufactured in one factory and clear goods at a concessional rate of duty after availing Modvat credit for goods manufactured in another factory.

Analysis:
The appeal was filed by M/s. Ceear Electronics to determine their eligibility for exemption under a small sale exemption notification for goods manufactured in one factory while clearing goods at a concessional duty rate after utilizing Modvat credit for goods manufactured in another factory. The Appellant's representative argued that they avail full exemption from duty for goods produced in their Kirti Nagar factory under Notification No. 1/93-C.E., and utilize Modvat credit for goods produced in their West Patel Nagar factory, citing precedents like the CCE, Ludhiana v. Munjal Gases case and Intertec v. CCE, Ghaziabad case. Conversely, the Departmental Representative contended that the Appellants cannot avail both benefits concurrently under Notification No. 1/93 since they were utilizing Modvat credit in their West Patel Nagar unit.

Upon reviewing the arguments, the Tribunal noted that the Appellants operate two units, one enjoying duty exemption and the other utilizing Modvat credit. The Tribunal emphasized that availing Modvat credit in one unit does not render the Appellants ineligible for duty exemption in the other unit. Citing the Munjal Gases case, the Tribunal highlighted that the specific wording of the notification does not prohibit the simultaneous utilization of duty exemption and Modvat credit across different units. Notably, the Tribunal referenced a prior decision involving Munjal Gases where no reversal of the decision was presented by the Revenue. Consequently, the Tribunal upheld the Appellant's position, setting aside the impugned order and allowing the appeal.

In conclusion, the Tribunal's decision clarified that the Appellants could avail the duty exemption for goods manufactured in their Kirti Nagar unit despite utilizing Modvat credit for goods produced in their West Patel Nagar unit. The judgment reaffirmed the interpretation of the notification's wording and upheld the Appellant's entitlement to both benefits based on established legal precedents and consistent tribunal decisions.