2005 (3) TMI 206 - AT - Central Excise

Summary

Issues involved: Whether a delay in filing an option by the proprietor of a small scale unit would lead to denial of exemption under Notification No. 8/99 from 1-4-1999 to 1-8-1999.

Details of the judgment:

1. Issue 1 - Delay in filing option for exemption:
The classification declaration required under Rule 173B for the year 1999-2000 was filed late, resulting in the goods being cleared with exempted rates. Differential duties were confirmed, and a penalty was imposed under Rule 173Q. The Commissioner (Appeals) did not consider certain decisions relied upon by the appellants, arguing that the exemption should not be denied for a procedural lapse.

2. Issue 2 - Mandatory nature of declaration option:
The Departmental Representative (DR) cited the case of Eagle Flask Industries Ltd. and argued that the declaration option under Notification 8/99 is mandatory, and non-fulfillment of this condition should disentitle eligibility to exemption. However, the assessee contended that the condition in question was procedural and not mandatory, emphasizing the intent of the proprietor to avail the benefit despite the delay.

3. Decision:
The Tribunal found merit in the assessee's submission, considering the delay in filing the option was due to the proprietor's sickness and that the intent to avail the benefit existed. As a result, the appeal was allowed, and the benefit availed by the assessee was upheld, emphasizing the liberal interpretation of the notification to grant eligibility to those intending to benefit from it.