1998 (6) TMI 155 - AT - Central Excise

Summary

Issues:
1. Eligibility for exemption under Notification 175/86 for factory relocation.
2. Interpretation of paragraph 4 of the notification regarding factory location change.
3. Applicability of exemption under Notification 175/86 for manufacturers shifting factories.

Analysis:
1. Eligibility for Exemption under Notification 175/86 for Factory Relocation:
The appeals were filed against an order-in-appeal granting exemption under Notification 175/86 to two respondents who shifted their factories to new locations. The Collector of Central Excise objected to the continued exemption claim due to the lack of small scale industry registration at the new premises. However, the Collector (Appeals) ruled in favor of the respondents, leading to the current appeals.

2. Interpretation of Paragraph 4 of the Notification Regarding Factory Location Change:
The issue revolved around the interpretation of paragraph 4 of Notification 175/86 concerning factory location changes. The department contended that shifting to a new location disqualified the manufacturers from availing previous year's exemptions. The Collector (Appeals) overturned this, leading to the current appeal challenging the interpretation of the notification.

3. Applicability of Exemption under Notification 175/86 for Manufacturers Shifting Factories:
The Tribunal considered the arguments presented by both parties. The respondents relied on a previous Tribunal decision and a Board's letter supporting the continuation of exemption benefits even when the new premises' registration was pending. The respondents emphasized that the exemption eligibility is tied to the manufacturer's clearances, not the factory's physical location. The Tribunal agreed with the respondents, stating that as long as the manufacturer met the exemption criteria, including previous year's benefit utilization, the shift in factory location did not disqualify them from claiming the exemption.

In conclusion, the Tribunal upheld the impugned order-in-appeal, stating that the exemption under Notification 175/86 remains valid even after factory relocation if the manufacturer meets the specified criteria. The decision emphasized that the exemption eligibility is linked to the manufacturer's clearances and previous benefit utilization, rather than the physical location of the factory. The appeal was dismissed, affirming the validity of the exemption claims for the respondents despite the factory relocations.