2000 (8) TMI 114 - AT - Central Excise

Summary

Issues involved:
The issues involved in the judgment are the denial of exemption under Notification No. 74/93-C.E. to the appellants, the denial of exemption under Notification No. 175/86 and its successor Notification No. 1/93, and the imposition of penalty on the appellants.

Denial of Exemption under Notification No. 74/93-C.E.:
The appellants, a unit of Uttar Pradesh State Electricity Board (UPSEB), manufactured PCC Poles and availed exemption under Notification No. 74/93-C.E. The show cause notice alleged that UPSEB cannot be deemed a factory belonging to the State Govt. and is not a department of the State Govt. The Additional Commissioner held that there was non-fulfilment of conditions under the notification. The appellants contended that their factory belongs to the State Govt. as per the provisions of the Electricity (Supply) Act, 1948. The Tribunal considered the provisions and held that the factory of the appellants belongs to the U.P. State Govt., making them eligible for the exemption under Notification No. 74/93-C.E.

Denial of Exemption under Notification No. 175/86 and No. 1/93:
The denial of exemption under these notifications was based on the appellants ceasing to be a Small Scale Industries (SSI) unit under Notification No. SO-232(O) issued under Section 11B of the Industries Development and Regulation Act, 1951. The Tribunal observed that the provisions of the IDRA or the notification issued under it do not impact the eligibility for exemption under the Central Excise notifications. The appellants' turnover exceeded the ceiling limit for exemption under these notifications, and they were willing to pay the differential duty. The Tribunal held that the appellants are entitled to the exemption under Notifications No. 175/86 and No. 1/93, and they are liable to pay duty for clearances exceeding the ceiling limit during the relevant period.

Imposition of Penalty:
The Tribunal found no grounds for the imposition of any penalty and set it aside. The appeal was disposed of in favor of the appellants, allowing them the benefit of exemption under Notification No. 74/93-C.E. and Notifications No. 175/86 and No. 1/93, while setting aside the penalty imposed on them.