2000 (6) TMI 42 - AT - Central Excise

Issues Involved:
1. Availability of exemption under Notification No. 175/86-C.E. as amended by Notification No. 55/92-C.E. for unregistered SSI units during the period 1-4-1992 to 21-5-1992.
2. Interpretation of clauses (a) and (b) of the first proviso to para 4 of Notification No. 175/86-C.E.
3. Impact of amending Notifications No. 55/92-C.E. and 67/92-C.E. on the eligibility for exemption.

Detailed Analysis:

1. Availability of Exemption under Notification No. 175/86-C.E. as Amended by Notification No. 55/92-C.E. for Unregistered SSI Units During the Period 1-4-1992 to 21-5-1992:
The core issue was whether unregistered SSI units could avail the exemption under Notification No. 175/86-C.E. as amended by Notification No. 55/92-C.E. during the specified period. The Tribunal noted conflicting decisions: one view held that the benefit continued for unregistered units, while another held that the amendment rendered clause (b) inoperative from 1-4-1992, limiting exemption to units with clearances not exceeding Rs. 7.5 lakhs.

2. Interpretation of Clauses (a) and (b) of the First Proviso to Para 4 of Notification No. 175/86-C.E.:
The Tribunal examined whether clauses (a) and (b) should be read conjunctively or disjunctively. The Revenue argued for a conjunctive reading, suggesting that "or" should be interpreted as "and" to fulfill the Notification's purpose. However, the Tribunal, citing various judicial precedents, concluded that the clauses should be read disjunctively, as indicated by the use of "or".

3. Impact of Amending Notifications No. 55/92-C.E. and 67/92-C.E. on the Eligibility for Exemption:
Notification No. 55/92-C.E. introduced a second proviso making clause (b) inapplicable if the manufacturer had availed exemption under clause (a) in any preceding financial year. Notification No. 67/92-C.E. added a third proviso suspending the second proviso from 22-5-1992 to 31-3-1993. The Tribunal considered the Ministry's clarificatory letter, which stated that the restriction imposed by Notification No. 55/92-C.E. would come into effect only from 1-4-1993, effectively suspending the operation of the second proviso for the entire financial year 1992-93.

Findings:
- The Tribunal found that the respondents had not availed of the exemption under clause (a) in any preceding financial year, thus their right to exemption under clause (b) was unaffected by the second proviso introduced by Notification No. 55/92-C.E.
- The Tribunal upheld the disjunctive reading of clauses (a) and (b), rejecting the Revenue's argument for a conjunctive interpretation.
- The Tribunal concluded that the second proviso was inoperative for the entire financial year 1992-93 due to the third proviso introduced by Notification No. 67/92-C.E., as clarified by the Ministry's letter.

Conclusion:
The Tribunal dismissed the Revenue's appeals and upheld the respondents' entitlement to exemption under Notification No. 175/86-C.E. as amended, for the period 1-4-1992 to 21-5-1992. The referred issue was answered in favor of the respondents.

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