1995 (1) TMI 214 - AT - Central Excise

Summary

Issues:
Interpretation of Notification 175/86 regarding duty exemption limit and first clearances.

Analysis:
The judgment by the Appellate Tribunal CEGAT, Madras, dealt with the interpretation of Notification 175/86 concerning duty exemption limits and first clearances. The Tribunal's order stated that the benefit of the notification had to be allowed up to the aggregate limit of Rs. 30 lakhs, with Rs. 15 lakhs each for two specified items, regardless of how the goods were cleared by the manufacturer. The Revenue argued that once the Rs. 30 lakhs limit was crossed, the benefit of the notification ceased, irrespective of the manner in which the goods were cleared within that limit.

The Tribunal referred to a similar case decided by the Hon'ble High Court of Madhya Pradesh, where the court held that the intention behind such notifications was to grant exemption on first clearances in chronological order up to a specified limit. The court emphasized that the exemption was not meant to be a total concession on goods cleared at any time during the financial year but specifically on the first clearances until the limit was reached. The court highlighted that the purpose was to benefit small manufacturers with clearances below a certain threshold in the previous year.

Based on the Madhya Pradesh High Court's judgment, the Tribunal referred a question of law to the High Court for clarification. The question pertained to whether the Appellate Tribunal was correct in interpreting the duty exemption benefit under Notification 175/86 and ordering a reevaluation of the manufacturer's refund claim if the other conditions of the notification were met. The issue revolved around the chronological assessment of first clearances and the application of duty exemption limits as per the notification's intent, emphasizing the importance of adhering to the sequential order of clearances to avail of the exemption benefits as intended by the government.