2008 (8) TMI 309 - AT - Central Excise

Simultaneous availment of Exemption Notifications Held that, since the Appellants are eligible for both the exemption notification and initially they were availing of Notification No. 4/97-C.E. and subsequently due to ignorance, they also filed a declaration for simultaneous availment of notification No. 38/97-C.E., it would not be correct, while denying simultaneous availment of both the notifications, to force the Appellant to avail the notification No. 38/97-C.E., whereas the Appellants wanted to continue under notification No. 4/97 as the same was more beneficial to them. Case remanded for re-quantification of duty.

Summary

Issues:
Interpretation of Notification 4/97-C.E. and Notification 38/97-C.E., Availment of multiple exemption notifications, Duty liability determination, Applicability of beneficial notification.

Analysis:
The case involved a dispute regarding the Appellants' eligibility to avail of two exemption notifications simultaneously, namely Notification 4/97-C.E. and Notification 38/97-C.E. The Appellants operated a 'minicement plant using vertical shaft kiln' with a certified capacity not exceeding 16,500 m.t. per annum. Notification 4/97-C.E. prescribed a concessional duty rate of Rs. 200 per m.t. for cement manufactured in a plant with a vertical shaft kiln. Subsequently, Notification 38/97-C.E. was issued, providing different duty rates based on turnover slabs. The Appellants filed a revised declaration opting for both notifications without realizing the conflict between them. The Department issued show cause notices for denying the benefit of Notification 4/97-C.E. and imposing penalties for duty underpayment.

The Addl. Commissioner confirmed duty demands and penalties, leading to appeals by the Appellants. The Commissioner of Central Excise (Appeals) upheld duty demands for the normal limitation period but set aside penalties. The Appellants' plea to avail the more beneficial Notification 4/97-C.E. was rejected. The Appellants contended that they were under a bona fide impression that they could avail both notifications simultaneously. They argued that they should be allowed to choose the more beneficial notification, citing a Tribunal's judgment in a similar case.

The Departmental Representative opposed the Appellants' contention, emphasizing that once the Appellants started availing of Notification 38/97-C.E., they should be denied the benefit of Notification 4/97-C.E. The Department maintained that the duty demands were rightly confirmed based on Notification 38/97-C.E.

The Tribunal analyzed the submissions and held that the Appellants, being eligible for both exemptions, should have been allowed to choose the more beneficial one. It was deemed incorrect to force the Appellants to avail of Notification 38/97-C.E. when they preferred Notification 4/97-C.E. The Tribunal referred to a previous judgment to support the Appellants' right to select the more advantageous exemption. Consequently, the impugned order was set aside, and the matter was remanded for re-quantifying the duty liability under Notification 4/97-C.E. The appeals were disposed of in favor of the Appellants.