2005 (11) TMI 109 - AT - Central Excise

Summary

Issues:
Eligibility of product for exemption under Notification 8/01 as amended by Notification No. 47/01.

Analysis:
The case involves the eligibility of the product manufactured by the appellants for exemption under Notification 8/01 as amended by Notification No. 47/01. The appellants, small scale industry manufacturers falling under Chapter Heading 9305, availed the benefit of small scale exemption for the year 2000-2001. However, the products manufactured by them were not initially included in the exemption under Notification No. 8/01, dated 1-3-2001. Subsequently, through Notification No. 47/01, dated 1st October, 2001, their products were covered under the said notification. The Revenue contended that duty should be paid for the period from 1-4-2001 to 30-9-2001, as the appellants cleared goods without payment during this time. The adjudicating authority and the Commissioner (Appeals) upheld this demand and penalty imposition.

The appellants argued that the amendment by Notification No. 47/01 should be considered effective from 1-4-2001, granting them the benefit of exemption. They relied on the proviso inserted by Notification No. 47/2001 to support their claim. On the other hand, the Revenue contended that the amendment was not retrospective and the benefit could only be availed from 1-10-2001 onwards. The key point of contention was the effective date of the amendment and its impact on the appellants' liability for duty payment during the interim period.

Upon considering the submissions from both sides, the Tribunal analyzed the proviso inserted by Notification 47/2001, which explicitly mentioned the clearances made between 1-4-2001 to 30-9-2001 for goods falling under Heading 93.05. The proviso aimed to include these clearances in the computation of aggregate clearance for the exemption under Notification 8/01. The Tribunal interpreted the proviso to indicate the government's intention to grant exemption for products falling under Heading 93.05, specifically referencing the clearances during the mentioned period for calculating the aggregate clearance value. Consequently, the Tribunal found that the appellants had established a prima facie case for the waiver of pre-deposit of duty and penalty. Therefore, the pre-deposit of duty and penalty was waived, and the recovery was stayed pending the appeal's disposal.