1996 (10) TMI 315 - AT - Central Excise

Issues:
1. Interpretation of Notification No. 175/86-C.E. and subsequent amendments.
2. Impact of Notification No. 55/92-C.E. on entitlement to benefits.
3. Effect of Notification No. 67/92-C.E. on the applicability of previous provisions.
4. Qualification requirements for availing benefits under the notifications.
5. Interpretation of the term "clearances" in the context of the notifications.

Analysis:

1. The central question in this appeal was whether the appellant company, a factory registered with D.G.T.D. or Director of Industries, was entitled to the benefits of Notification No. 175/86-C.E. as amended by subsequent notifications. The Tribunal examined the relevant extracts of the notifications to determine the impact of the changes on the appellant's entitlement to the exemption.

2. It was acknowledged by both parties that the amendment introduced by Notification No. 55/92-C.E. from 1-4-1992 affected the entitlement of DGTD registered units like the appellant company. However, a dispute arose regarding the effect of Notification No. 67/92-C.E., dated 22-5-1992, which suspended the operation of the second proviso in para 4 of Notification No. 175/86-C.E. The appellant argued that this suspension effectively revived the old proviso, while the Revenue contended that only the first proviso remained operative during the specified period.

3. The Tribunal sided with the Revenue's interpretation of the notifications, emphasizing the importance of giving a plain meaning to the statutory provisions. It concluded that Notification No. 67/92-C.E. did not specifically revive the old proviso but only lifted the non-operation of a certain clause during a specified period. Therefore, the appellant's plea based on the revival of the old proviso was rejected.

4. The Tribunal also addressed the qualification requirements for availing benefits under the notifications, particularly focusing on the term "small scale industry." The appellant argued that registration with the Director of Industries need not be as a small-scale industry, while the Revenue contended that the notifications were intended for small scale industrial units. The Tribunal agreed with the Revenue, stating that the expression "small scale industry" qualified both the Director of Industries and Development Commissioner, emphasizing the restrictive nature of the relaxations introduced by the notifications.

5. Another key issue was the interpretation of the term "clearances" in the context of the notifications. The appellant argued that the word "clearances" in one of the provisos should be understood as "clearances of specified goods" and not all excisable goods, which would impact the appellant's entitlement to the exemption. The Tribunal agreed with the appellant's interpretation, highlighting that exceptions in the provisos allowed certain units to qualify for the benefits despite not strictly meeting the criteria of a small scale industry. Consequently, the Tribunal directed the adjudicating authority to re-examine the duty demand from the appellant based on the findings, ultimately disposing of the appeal in the appellant's favor.

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