1989 (9) TMI 268 - AT - Central Excise

Summary

Issues: Interpretation of Notification 175/86 regarding exemption limit for specified goods.

In this case, the Appellate Tribunal CEGAT, Madras, considered the appeals against the orders of the Collector of Central Excise (Appeals), Madras, which upheld the rejection of the appellants' claim by the original adjudicating authority. The appellants, a Small Scale Unit, were eligible for the benefit of Notification No. 175/86 as they were manufacturing plywood, veneers, and flush doors falling under specific sub-headings. The issue arose when the appellants cleared certain items and were asked to pay duty on them, even though they had availed of exemption up to Rs. 15 lakhs for plywood and blackboards. The original authority held that the benefit of exemption was not available as the aggregate value of clearances exceeded Rs. 30 lakhs for the specified goods. The Collector of Central Excise (Appeals) also rejected the refund claim, stating that duty paid goods would be computed in the aggregate value for exemption purposes. The main question for consideration was whether the benefit of the notification was available up to Rs. 15 lakhs for each specified item, subject to an aggregate value of Rs. 30 lakhs, and if the appellants' claim was maintainable. The Tribunal found that the lower authorities' interpretation of the notification created discrimination between manufacturers based on the order of clearance of goods, which was unjustified. The Tribunal held that the benefit of exemption up to Rs. 15 lakhs for each category of goods should not be denied to the appellants, even if the clearances exceeded the limit for the first category of goods. The Tribunal directed the lower authority to reconsider the matter and allow the refund claim if other parameters of the notification were satisfied, irrespective of the clearances exceeding the limit for the first category of goods. The appeals were allowed in favor of the appellants.