1993 (10) TMI 199 - AT - Central Excise

Summary

Issues:
1. Appeal against order passed by Collector of Central Excise (Appeals), Bombay.
2. Claim of exemption under Notification No. 126/86.
3. Conditions for availing concession at the rate of 20%.
4. Fulfillment of conditions for exemption under the notification.
5. Interpretation of the provisions of Drugs (Price Control) Order, 1979.
6. Exemption for S.S.I. Units from fixed retail prices under Drugs (Price Control) Order.
7. Justification for granting exemption to S.S.I. Units under the notification.

Analysis:
The appeal was filed against the order passed by the Collector of Central Excise (Appeals), Bombay. The appellants, manufacturers of Antiseptic perfumed creams, claimed exemption under Notification No. 126/86. The Department challenged the exemption granted by the Assistant Collector under Section 35A(4) of the Central Excises and Salt Act, stating that the exemption was not proper. The key issue revolved around the fulfillment of conditions for availing the concession at the rate of 20%, which required the products to be manufactured under a Drug License issued under the Drugs and Cosmetics Act, 1979, and their prices to be fixed under Drugs (Price Control) Order, 1979.

The appellants, being an S.S.I. Unit, held a Drugs & Cosmetics license, exempting them from the Drugs (Price Control) Order. However, the Department argued that the product did not fulfill the second condition of having prices fixed under the Price Control Order, making them ineligible for exemption under the notification. The Collector (Appeals) agreed with the Department, stating that the Assistant Collector erred in granting exemption due to non-fulfillment of the second condition. The appellants contended that this would create an unfair situation favoring larger units subject to price control over smaller S.S.I. Units exempted from the price control order.

The Tribunal examined the provisions of the Drugs (Price Control) Order, 1979, and noted that S.S.I. Units were exempted from fixed retail prices under certain categories. The Government had fixed the price of the product in question under the Price Control Order, although S.S.I. Units were exempted from fixed retail prices. The Tribunal emphasized that the notification did not specify that the price fixation should be for a specific branded product of an S.S.I. Unit. As long as the price of the product from the industry was fixed, the benefit under the notification should apply. Therefore, the Tribunal set aside the impugned order and allowed the appeal, granting the appellants the exemption under Notification No. 126/86.

In conclusion, the judgment focused on the interpretation of the conditions for exemption under the notification, the exemption of S.S.I. Units from fixed retail prices under the Price Control Order, and the justification for granting exemption to S.S.I. Units based on the plain reading of the notification and the provisions of the Price Control Order.