2000 (3) TMI 78 - AT - Central Excise

Summary

Issues Involved:
1. Eligibility for deemed credit facility after crossing the prescribed limit of Rs. 75,00,000/-.
2. Interpretation of Notification No. 1/93-C.E. and Ministry's Order No. TS/36/94 TRU.
3. Validity of the Tribunal's decision in the case of Sri Venkateswara Steel Industries.

Summary:

1. Eligibility for Deemed Credit Facility:
The core issue was whether manufacturers who crossed the clearance limit of Rs. 75,00,000/- were entitled to the benefit of deemed credit facility as per Ministry's Order No. TS/36/94 TRU dated 1-3-1994, read with Notification No. 1/93-C.E. dated 28-2-1993, and the Chandigarh Central Excise Collectorate Trade Notice No. 81/94 dated 25-7-1994. The Tribunal concluded that re-rollers whose aggregate value of clearances exceeded Rs. 75,00,000/- and who were paying full Central Excise Duty were not eligible for the deemed credit benefit.

2. Interpretation of Notification No. 1/93-C.E. and Ministry's Order No. TS/36/94 TRU:
Notification No. 1/93-C.E. provided exemptions for specified goods up to an aggregate value of Rs. 75,00,000/-. Beyond this limit, no exemption was available, and full duty was applicable. The Ministry's Order dated 1-3-1994 allowed deemed credit for ingots and re-rollable materials for re-rollers availing the exemption under Notification No. 1/93-C.E. The Tribunal emphasized that the term "availing of the exemption" meant currently benefiting from the exemption, which ceased once the clearance limit of Rs. 75,00,000/- was crossed.

3. Validity of the Tribunal's Decision in the Case of Sri Venkateswara Steel Industries:
The Tribunal reviewed its earlier decision in the case of Sri Venkateswara Steel Industries, which had allowed deemed credit even after crossing the Rs. 75,00,000/- limit. The Tribunal found that this decision did not correctly interpret the term "availing of the exemption" and clarified that the benefit of deemed credit was not available beyond the specified clearance limit.

Conclusion:
The Tribunal held that manufacturers who exceeded the clearance limit of Rs. 75,00,000/- were not entitled to the deemed credit facility. Consequently, the appeals filed by the Revenue were allowed, and those by the assessees were dismissed. Personal penalties, where levied, were set aside.