2002 (8) TMI 178 - AT - Central Excise

Summary

Issues:
1. Whether the exemption under Notification No. 175/86-Central Excise is available to the goods manufactured by M/s. Venus Industries.

Analysis:
The appeal filed by M/s. Venus Industries revolves around the eligibility of their goods for exemption under Notification No. 175/86-Central Excise. The appellant's advocate argued that they had been manufacturing stainless steel cutlery and utensils for over 25 years, falling under Tariff Item 68 of the old Central Excise Tariff. They claimed exemption under various notifications, including Notification No. 77/85, stating compliance with all necessary conditions. The Commissioner Central Excise disallowed the exemption under Notification No. 175/86 on the grounds of non-availment of exemption under Notification No. 77/85 during the preceding year due to a procedural lapse in filing the required declaration.

The appellant's advocate contended that their clearances were always below Rs. 20 lakhs during the period of Notification No. 77/85, making them eligible for exemption and free from licensing control. They argued that failure to file the declaration should not deny them substantial benefits, citing the decision in Vikram Laminators case. Additionally, they referenced other cases to support their stance and emphasized that no contravention of Central Excise Act or Rules was done with an intention to evade duty.

On the other hand, the learned SDR countered the arguments by stating that the appellant failed to establish availing the benefit of Notification No. 77/85 during the preceding financial year. They referred to a decision where benefit under Notification No. 175/86 was denied due to the lack of proof of availing any listed notifications in the proviso to Para 4. The SDR distinguished the case from Vikram Laminators and highlighted the importance of proving eligibility for exemptions.

The Tribunal considered both sides' submissions and the impugned order passed by the Commissioner on remand. The Tribunal analyzed the conditions for availing exemption under Notification No. 77/85, emphasizing the necessity of fulfilling specified conditions for exemption eligibility. The Tribunal noted that the appellant's failure to file required documents hindered the verification process by the Department, preventing confirmation of compliance with exemption conditions. Citing a Supreme Court case, the Tribunal reiterated that exemption benefits are subject to fulfilling conditions, not mere claims of eligibility. Following precedent cases, the Tribunal upheld the denial of exemption under Notification No. 175/86, confirming the Central Excise duty demand and imposing a penalty of Rs. 10,000 considering the circumstances.

In conclusion, the Tribunal rejected the appeal, emphasizing the importance of fulfilling conditions for exemption eligibility and the necessity of proper documentation to support claims of exemption benefits.