1990 (8) TMI 273 - AT - Central Excise

Summary

Issues:
1. Interpretation of Notification 175/86 and its applicability to clearances made by the appellants in March 1986.
2. Suspension of Notification 175/86 by Notification 202/86 for the period from 25-3-1986 to 31-3-1986.
3. The denial of benefit to the appellants based on the first clearance in a financial year criterion.

Analysis:
1. The appeal was against the order of the Collector of Central Excise (Appeals), Madras regarding the denial of the benefit of Notification 175/86 to the appellants for clearances made in March 1986. The lower authority held that the Notification applied from 1-4-1986 and not from 1-3-1986, as the clearances in March could not be considered the first clearance in a financial year unless no clearances occurred from April 85 to February 86. The appellants argued they met the requirements of Notification 175/86 from 1-3-1986 and should be eligible for its benefits. The Tribunal observed that the lower authority did not consider other parameters of the Notification and remanded the matter for a fresh decision based on this observation.

2. The Notification 175/86 was suspended by Notification 202/86 for clearances made between 25-3-1986 and 31-3-1986. The Tribunal noted that this suspension indirectly confirmed the applicability of Notification 175/86 from 1-3-1986 for clearances after that date. The Tribunal highlighted that if the government intended to make the Notification inapplicable from 1-4-1986, they could have issued a separate notification to that effect. The suspension for a specific period indicated the Notification's general applicability from 1-3-1986.

3. The denial of benefit to the appellants was based on the criterion of the first clearance in a financial year. The Collector (Appeals) held that the benefit of Notification 175/86 would be applicable only from 1-4-1986. However, the Tribunal disagreed, stating that the term "first clearance" should be interpreted in the context of the order in which different rates apply, not as the initial clearance in a financial year. The Tribunal found that the lower authority did not consider all parameters of the Notification and remanded the matter for a fresh decision based on this interpretation.

In conclusion, the Tribunal remanded the matter to the lower appellate authority for a fresh decision considering all parameters of Notification 175/86. The Tribunal held that the denial of benefit to the appellants was not maintainable and allowed the appeal by remand.