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Issues:
Interpretation of excise duty notification under the Central Excises and Salt Act, 1944 regarding capital investment threshold for duty rates. Analysis: The petitioner, a sole proprietor of a firm manufacturing aluminium conductors and cables, was registered under the Small Scale Industries Scheme due to an initial investment below Rs. 7,50,000. A notification by the Central Government imposed 4% and 12% ad valorem excise duty on specific products if the capital investment was below the threshold. The petitioner provided evidence to the Assistant Collector to demonstrate eligibility for the lower duty rates. However, the Assistant Collector initially allowed the lower rates only from June 1971, charging higher rates for the period before that. The petitioner was later informed of a deficiency in excise duty, leading to a dispute over the applicable duty rates. The High Court held that the lower duty rates of 4% and 12% were applicable from the date of the notification, i.e., 1st June 1970, without any requirement for satisfaction of the Assistant Collector at a later date. The Court emphasized that the crucial factor was the capital investment at the time of initial installation, not the timing of the Assistant Collector's satisfaction. Therefore, once the Assistant Collector was satisfied that the investment was below the threshold, the duty rates should have been applied from the notification date. Any calculation based on a later satisfaction date was deemed erroneous. Consequently, the Court allowed the petition, quashing the demand for the shortfall in excise duty for the period when the petitioner was charged at higher rates. The petitioner was granted costs, affirming that the duty rates should have been determined based on the investment threshold at the time of initial installation, as specified in the notification.
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