1984 (12) TMI 300 - AT - Central Excise

Summary

Issues: Interpretation of Central Excise notifications regarding exemption for manufacturers and loan licensees.

In the case before the Appellate Tribunal CEGAT New Delhi, the appeal was filed by M/s. Jaideep Corporation against an order-in-appeal passed by the Appellate Collector of Central Excise, Madras. The issue revolved around M/s. Jaideep Corporation's claim for exemption under Notification No. 71/78-C.E. and Notification No. 305/77-C.E. for manufacturing sodium silicate in the factory of M/s. Shree Hubli Chemical Works. The dispute arose when the Assistant Collector ruled that the clearances by M/s. Jaideep Corporation, exceeding Rs. 5 lakhs, were not permissible as Shree Hubli Chemical Works had already availed of the exemption. The Appellate Collector upheld this decision, leading to the appeal. The key contention was whether M/s. Jaideep Corporation, as a loan licensee, could be considered a separate manufacturer entitled to independent exemption under the notifications.

The accounts manager for M/s. Jaideep argued that they were a loan licensee under Notification No. 305/77-C.E. and should be treated as a separate manufacturer, distinct from Shree Hubli Chemical Works. He cited precedents where loan licensees were granted independent exemption. However, the department's counsel emphasized that the notifications required all productions by different manufacturers in a financial year to be clubbed together to determine the exemption limit of Rs. 5 lakhs. The Tribunal noted that while some Collectorates had extended the exemption to loan licensees, the strict wording of the notification did not support such an interpretation. The Tribunal emphasized that they could only consider the law as written and could not direct exemptions beyond the notification's scope.

Furthermore, M/s. Jaideep Corporation's reliance on trade notices and judgments to support their claim was deemed inapplicable to their situation. The Tribunal highlighted the distinction between the circumstances envisaged in the trade notices and the actual operations of M/s. Jaideep Corporation. Additionally, the Tribunal addressed Shree Hubli Chemical Works' claim under Notification No. 305/77-C.E., noting that the terms of the notification did not align with their actions. Ultimately, the Tribunal concluded that based on the clear language of the notifications, the appeal by M/s. Jaideep Corporation had to fail, and it was dismissed.