1987 (4) TMI 210 - AT - Central Excise

Summary

Issues: Interpretation of Notification No. 142/78-CE, licensed capacity for availing duty exemption, impact of Industrial Policy on licensed capacity, applicability of amendments in notification 152/79.

In this case, the main issue revolves around the interpretation of Notification No. 142/78-CE, specifically concerning the licensed capacity for availing duty exemption. The appellant company sought to enhance their licensed capacity by 25% based on the Industrial Policy, arguing that their licensed capacity should be considered as 5 lacs and not 4 lacs. The contention was that the term "licensed capacity" in the exemption notification should be understood as notion licensed capacity, distinct from actual licensed capacity certified by the D.G.T.D. However, both the Assistant Collector and Appellate Collector rejected this claim, leading to the appellant's appeal.

The appellant reiterated their grounds for refund before the tribunal, emphasizing that the concession under Notification No. 142/78 should apply to the entire licensed capacity for the financial year 1979-80, as per an amendment in notification 152/79. The tribunal carefully examined the case, considering the press notes from the Ministry of Industrial Development provided by the appellants. The tribunal emphasized the strict interpretation of the notification, highlighting that it specifically refers to licensed or installed capacity certified by the Development Officer. The tribunal dismissed the notion of introducing a concept of "notional" licensed capacity and upheld the lower authority's decision.

Furthermore, the tribunal agreed with the Appellate Collector's reasoning that the original notification was issued after a press release regarding industrial policy, indicating that if the government intended to provide relaxation based on the policy, it would have been explicitly mentioned in the notification. The tribunal rejected the appellant's argument based on notional licensed capacity. Additionally, the tribunal analyzed the amendments in notification 152/79, clarifying that the amendments did not alter the restriction on exemption to 75% of the licensed capacity for the financial year 1978-79. The tribunal dismissed the appeal, affirming the restriction on exemption as per the original notification for the relevant financial year.

In conclusion, the tribunal upheld the strict interpretation of Notification No. 142/78-CE, emphasizing the certified licensed capacity for availing duty exemption and rejecting the notion of notional licensed capacity. The tribunal also clarified the impact of industrial policy on licensed capacity and affirmed the applicability of amendments in notification 152/79 to maintain the restriction on exemption as per the original notification.