1997 (12) TMI 215 - AT - Central Excise

Summary

Issues:
- Interpretation of Notification No. 175/86 for duty exemption.
- Requirement of declaration for availing exemption benefits.
- Applicability of para 4(b) of the notification in current financial year.

Interpretation of Notification No. 175/86 for duty exemption:
The case involved a manufacturer claiming exemption from duty under Notification No. 175/86 for the production of Veneer and Peeling Roller. The exemption limit was set at Rs. 7.5 lakhs for the financial year 1988-89. The dispute arose when the clearance value exceeded the limit in the current financial year (1989-90). The Assistant Commissioner rejected the exemption for the current year based on the exceeded limit. The lower appellate authority upheld this decision, leading to an appeal before the Tribunal.

Requirement of declaration for availing exemption benefits:
The appellant argued that under para 4(b) of Notification No. 175/86, registration with the Director of Industries as an SSI Unit was not necessary if the manufacturer had availed of the exemption in the preceding financial year. The appellant contended that since their clearances did not exceed Rs. 7.5 lakhs in 1988-89, they were entitled to the exemption benefits without the need for registration. The Tribunal referred to a previous judgment to support this argument, emphasizing that filing a declaration was not a prerequisite for availing the exemption under para 4(b).

Applicability of para 4(b) of the notification in the current financial year:
The Revenue contended that without a declaration of availing the exemption in the previous year, the appellant could not claim benefits for the current financial year where the limit was exceeded. However, the Tribunal, relying on the judgment in Vikram Laminators Pvt. Ltd., held that as long as the clearances did not surpass the limit in the preceding financial year, the appellant was entitled to the exemption benefits for the current year under para 4(b). The Tribunal set aside the lower authorities' decisions and allowed the appeal, granting consequential relief to the appellants for the current financial year.

This judgment clarifies the application of Notification No. 175/86 for duty exemption, emphasizing the importance of clearances not exceeding the specified limits in preceding financial years to avail of benefits in subsequent years. It also establishes that filing a declaration is not mandatory for claiming exemption benefits under certain provisions of the notification.