1992 (2) TMI 235 - AT - Central Excise

Summary

Issues:
- Interpretation of Notification No. 77/85 and Notification No. 167/79 for exemption eligibility.
- Exclusion of value of clearances under Notification No. 167/79 for computing clearances under Notification No. 77/85.
- Applicability of Explanation II(a) to Notification No. 77/85 in determining exemption eligibility.
- Consideration of separate Notifications for benefit entitlement.
- Decision on the appeal against the Order-in-Appeal passed by the Collector of Central Excise (Appeals), Madras.

Analysis:
The appeal before the Appellate Tribunal CEGAT, New Delhi involved a dispute regarding the interpretation of Notification No. 77/85 and Notification No. 167/79 for exemption eligibility. The respondents, manufacturers of rubber moulded components, were availing exemption under Notification No. 77/85 for the year 1985-86. The Assistant Collector denied the exemption, stating that it could be allowed only after the company crosses a clearance limit of Rs. 20 lakhs. However, the Collector (Appeals) set aside this decision, citing Explanation II(a) to Notification No. 77/85, which excludes goods cleared free of duty from the computation of clearance value. The Revenue appealed this decision.

During the proceedings, the respondents requested a decision on merits based on their written submissions, referencing previous cases to support their argument that benefits under separate Notifications should be available separately unless specified otherwise. The appellants argued that if the value of clearances under Notification No. 167/79 is not excluded, large units could avoid duty payment by supplying goods under a different procedure. However, the Bench questioned how this concern could impact the interpretation of the Notification.

The Appellate Tribunal upheld the decision of the Collector (Appeals), emphasizing that Explanation II(a) to Notification No. 77/85 clearly states that certain clearances should not be taken into account for exemption calculation. The Tribunal agreed that the respondents were entitled to the benefit as claimed under the Notifications. Therefore, the appeal by the Revenue was rejected as lacking merit, affirming the decision of the Collector (Appeals) and allowing the respondents' appeal against the Assistant Collector's order.