1993 (7) TMI 181 - AT - Central Excise

Issues Involved:

1. Whether para 4(b) of Notification No. 175/86-C.E., dated 1-3-1986, as amended, could be denied to the appellants on the ground that the premises in question were not registered with the Directorate of Industries of any state or with the D.C. (SSI).

Issue-wise Detailed Analysis:

Issue 1: Applicability of Para 4(b) of Notification No. 175/86-C.E.

In all the appeals, the primary issue was whether the benefit of para 4(b) of Notification No. 175/86-C.E., dated 1-3-1986, as amended, could be denied on the grounds that the premises were not registered with the Directorate of Industries or the D.C. (SSI).

The department issued show cause notices to the assessees, questioning why the benefit of the notification should not be denied since the unit was not registered at the new address. However, it was undisputed that the assessees were registered SSI Units holding the necessary certificates.

The Assistant Collector confirmed the short levy demand and denied the benefit of the notification on the grounds that the new units were not registered. In some cases, it was held that even if there was registration, the benefit was available only from the date of amendment of the certificate incorporating the new address, making short levy recoverable for the interim period when the unit did not have the registration.

The Collector, however, disagreed with the Original Authority, ruling that the benefit of para 4(b) could not be denied as long as the manufacturer remained the same and had been enjoying the benefit of the exemption under one of the specified notifications during the preceding financial year. The emphasis in para 4(b) was on the "manufacturer" and not the "factory." The Collector concluded that there was no provision in para 4(b) requiring the factory to remain the same as during the preceding financial year. Therefore, the benefit of para 4(b) was available to the second unit under consideration.

The Revenue contended that since the party was not registered as an SSI unit as required under para 4 of the notification, they were not entitled to the benefit. The assessees filed cross appeals.

Upon hearing both sides, the Tribunal concurred with the Collector's findings, emphasizing that the notification's effective portion extended the exemption to "a manufacturer from one or more factories." The Tribunal noted that para 4 did not stipulate that a change of factory address would disentitle the assessee from the exemption or automatically cancel the registration. As long as the change of address was incorporated in the certificate of registration, the certificate was deemed valid from its original date. The delay in getting the change of address incorporated did not disentitle the manufacturer from claiming the exemption. The reasoning given by the Collector was deemed correct in law.

The Tribunal referred to the case of Accura Industries, where it was held that availment of an exemption notification is independent of exemption from licensing control on filing a declaration under Notification No. 111/78 or Notification 2/81. The Tribunal also cited the Supreme Court's rulings in the cases of Neoli Sugar Factory, Oswal Agro Mills Ltd., and Vishwanath Paper Mills, which supported the interpretation that exemption notifications should be given their due effect, keeping in view the underlying purpose.

Conclusion:

The Tribunal found no merits in the Revenue's appeals and dismissed them, thereby upholding the Collector's decision to grant the benefit of Notification No. 175/86-C.E. to the appellants.

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