2009 (12) TMI 790 - AT - Central Excise

Summary

Issues Involved:
1. Validity of the demand of duty confirmed by the Adjudicating Authority.
2. Interpretation of Notification No. 1/93-C.E. regarding the option to avail exemption for multiple units of a manufacturer.
3. Applicability of previous Tribunal decisions to the present case.

Summary:

1. Validity of the Demand of Duty Confirmed by the Adjudicating Authority:
The appellants challenged the order dated 6th August 2004 by Commissioner (Appeals), Meerut, which set aside the Adjudicating Authority's order confirming a demand of Rs. 6,25,000/- u/s Rule 9(2) of the Central Excise Rules, 1944. The demand was based on alleged short payment of duty due to contravention of Notification No. 1/93-C.E. for the period from April 1996 to July 1996.

2. Interpretation of Notification No. 1/93-C.E. Regarding the Option to Avail Exemption for Multiple Units of a Manufacturer:
The respondents, engaged in manufacturing wood articles under Chapter 44, opted to pay full excise duty for their Sitapur unit while availing exemption for their Dehradun unit. The appellants argued that once a manufacturer opts to pay full duty for one unit, the same option must apply to all units in the same financial year. They cited the Tribunal's decision in Buildmat (P) Ltd. v. CCE, Bangalore to support their contention. However, the Tribunal found that Clause (iii) of the Notification, which considers the aggregate value of clearances for eligibility, does not mandate a uniform option for all units. The Tribunal emphasized that the notification allows manufacturers discretion to choose which units will avail the exemption.

3. Applicability of Previous Tribunal Decisions to the Present Case:
The Tribunal supported its view by referencing previous decisions, including Polyinks Pvt. Ltd. v. CCE, Delhi-IV, Faridabad, CCE, Ludhiana v. Munjal Gases, and Ceear Electronics v. CCE, Delhi-I. These cases established that a manufacturer could avail exemption for one unit while not availing it for another. The Tribunal also cited the Larger Bench decision in Intertec v. CCE, Ghaziabad, which allowed manufacturers to avail exemption for specified goods while paying full duty for non-specified goods from the same unit.

Conclusion:
The Tribunal concluded that the notification and its amendment do not require a manufacturer to uniformly apply the option across all units. The appeal was dismissed, upholding the Commissioner (Appeals)'s decision to set aside the Adjudicating Authority's order. The Tribunal clarified that the decision in Buildmat (P) Ltd. was not relevant to the present issue.