2004 (12) TMI 593 - AT - Central Excise

Summary

Issues:
1. Interpretation of Notification No. 38/97 and Notification No. 4/97 under the Central Excise Tariff Act.
2. Permissibility of switching between notifications during a financial year.
3. Liability for payment of differential duty.

Analysis:
1. The appellant, engaged in manufacturing Kraft Paper under Chapter Heading No. 4804.90, claimed benefits under Notification No. 38/97 and Notification No. 4/97 simultaneously. Upon realizing this was impermissible, the appellant opted for Notification No. 4/97 from 24-4-1998, paying the due differential duty of Rs. 64,460. The Department contended that once an option is exercised under Notification No. 38/97, it cannot be changed within the same financial year. The Commissioner held that the appellant could not avail of benefits under either notification due to switching options during the financial year.

2. The appellant's representative argued that the appellant did not switch from Notification No. 38/97 to Notification No. 4/97 but instead rectified the simultaneous availment issue by paying the differential duty and continuing under Notification No. 4/97 from 24-4-1998. It was emphasized that the appellant had exited the Small Scale Industries (SSI) scheme from 1-4-1998 by paying the differential duty, rendering the benefit under Notification No. 38/97 ineffective for the entire financial year.

3. The Tribunal observed that the appellant's intention was not to switch between notifications but to rectify the simultaneous availment error. The appellant paid the differential duty and continued under Notification No. 4/97, thus not engaging in a prohibited switch from Notification No. 38/97. Consequently, the Commissioner's order was deemed misconceived and set aside.

Conclusion:
The Tribunal allowed the appeal, granting consequential relief if applicable, as the appellant's actions did not constitute a prohibited switch between notifications but rather a correction of an inadvertent simultaneous availment, leading to the payment of the due differential duty and continued operation under Notification No. 4/97.