2014 (12) TMI 776 - HC - Central Excise

Simultaneous availment of benefit of exemption under Notification No 1/93 CE and 22/94 CE - Assessee contends that it did not avail the benefit under both the Notifications simultaneously at any given point of time from 15.03.1995 onwards and that depending upon the circumstances it availed the benefit either under Notification No.1/93 or 22/94 - whether the respondent was entitled to avail the benefit under Notification No.1/93 on the one hand and Notification No.22/94 on the other hand within the same financial year even for different periods by pressing into service one of the notifications - Held that - The period in question in the instant case is 15.03.1995 to 31.03.1995. This is obviously subsequent to the publication of Notification No.22/95. Notification No.22/95 became operational at the end of the financial year 1994-95. Though the record is not that clear it appears that for the substantial part of the financial year 1994-95 the respondent availed the benefit under both the notifications till Notification No.22/95 came into force but with effect from the date on which it came into force it availed the benefit under only one of the notifications i.e., 22/94. It is not even alleged that the respondent has availed such dual benefit after Notification No.22/95 came into force. In fact the assessing authority who issued show cause notice examined the record and found that the benefit under Notification No.22/94 alone was utilised for the period in question. The appellate authority however proceeded on the assumption that once the respondent has availed the benefit under Notification No.1/93 for a part of financial year 1994-95 it is not entitled to switch over to the benefit under the other notification. This is not at all evident from either the notification or any decided case. The Tribunal has in fact pointed out that accepting the contention of the Department would amount to giving retrospective effect to Notification No.22/95. We do not find that any substantial question of law arises for consideration. - Decided against Revenue.

Summary

Issues:
1. Interpretation of Central Excise Act regarding availing benefits under different notifications within the same financial year.
2. Application of Notification No.22/95 and its impact on manufacturers.
3. Assessment of whether the respondent availed dual benefits under different notifications simultaneously.
4. Examination of precedents and legal reasoning in deciding the case.

Issue 1: Interpretation of Central Excise Act regarding availing benefits under different notifications within the same financial year.
The case involved an appeal under Section 35-G of the Central Excise Act, 1944, filed by the Revenue against a Tribunal order. The respondent, a small scale industry manufacturing paper products, was granted exemptions under Notification No.1/93 and concessional duty under Notification No.22/94. However, a subsequent Notification No.22/95 restricted manufacturers from availing benefits under both notifications simultaneously in a financial year. The dispute arose when the Revenue alleged that the respondent availed dual benefits under both notifications during a specific period in 1995. The appellant argued that the respondent should not be allowed to switch between notifications within the same financial year, contrary to the spirit of Notification No.22/95.

Issue 2: Application of Notification No.22/95 and its impact on manufacturers.
Notification No.22/95 aimed to prevent manufacturers from simultaneously availing exemptions and concessional duties under different notifications in the same financial year. The appellant contended that the respondent wrongly switched between Notification No.1/93 and Notification No.22/94, violating the restrictions imposed by Notification No.22/95. However, the Tribunal found that the respondent only utilized the benefit under Notification No.22/94 during the period in question, post the enforcement of Notification No.22/95, and did not avail dual benefits as alleged by the Revenue.

Issue 3: Assessment of whether the respondent availed dual benefits under different notifications simultaneously.
The assessing authority initially issued a show cause notice alleging that the respondent availed dual benefits under both notifications. However, upon examination, it was found that the respondent only utilized the benefit under Notification No.22/94 for the relevant period. The Tribunal highlighted that the appellant's argument would imply giving retrospective effect to Notification No.22/95, which was not supported by the law or any precedent. The Tribunal dismissed the appeal, emphasizing that no substantial question of law arose for consideration.

Issue 4: Examination of precedents and legal reasoning in deciding the case.
The appellant argued that the Tribunal and the assessing authority ignored precedents and permitted the respondent to switch between notifications within the same financial year. However, the Tribunal's decision was based on a thorough analysis of the notifications and the respondent's utilization of benefits. It was concluded that the respondent did not breach the restrictions imposed by Notification No.22/95 and did not avail dual benefits as alleged by the Revenue. The Court dismissed the appeal, affirming the Tribunal's decision and finding no substantial question of law to consider.