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1993 (8) TMI 169 - AT - Central Excise
Issues:
Eligibility of the appellants for exemption under clause a(i) of Notification No. 175/86 dated 1-3-1986. Detailed Analysis: The appellants, registered SSI Units engaged in manufacturing auto parts, were availing benefits under Notification 175/86 by filing declarations under Rule 57G to avail modvat credit under Rule 57A. They paid duty at a concessional rate on clearances up to Rs. 75 lakhs. However, show cause notices were issued for clearing goods at a concessional rate without availing modvat credit, leading to demands being confirmed by the authorities. The issue was whether the appellants were entitled to the benefit of the notification despite not availing modvat credit. The Tribunal observed that the notification did not mandate availing modvat credit even if a declaration was filed. The appellants, being SSI units fulfilling all conditions of the notification, were eligible for the benefit. The notification provided two rates - concessional or nil, without exclusion. The appellants had the option to avail modvat credit, and filing a declaration did not negate their eligibility for the notification. The Tribunal rejected the argument that clauses (i) and (ii) of the notification were mutually exclusive, as the notification did not indicate such exclusion. In the case of M/s. Rotex Manufacturers and Engg. (Guj.) P. Ltd., the Department alleged intentional removal of goods at a concessional rate to allow buyers to avail higher credit, but this remained unsubstantiated. The Tribunal held that the appellants were eligible for exemption under clause a(ii) of the notification, setting aside duty demands and penalties in all cases. The Tribunal emphasized that the appellants were entitled to the benefit of the exemption under the notification, leading to the allowance of appeals and consequential relief. The duty demand and penalty were set aside, and the decision in the case of CCE, Pune v. M/s. Unique Enterprises was noted, with the cross objection abating.
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