1997 (1) TMI 342 - AT - Central Excise

Summary

Issues:
Eligibility for benefit under Notification No. 175/86-C.E. for a manufacturer of Electrical Machines - space erosion machines.
Interpretation of Para 4 of Notification No. 175/86-C.E. regarding small scale exemption.
Applicability of small scale exemption to a factory not registered with the Directorate of Industries or the Development Commissioner.
Denial of benefit under Notification No. 175/86-C.E. due to exceeding value of clearances and non-fulfillment of conditions.

Analysis:
The appeal pertains to M/s. Modern Machine Tools, Bombay, concerning their eligibility for the benefit of Notification No. 175/86-C.E. related to the manufacture of Electrical Machines. The issue arose as the appellants were denied the benefit based on not being a registered small scale industry under the Industries (Development and Regulations) Act, 1951, and their clearances exceeding Rs. 7.5 lakhs during the relevant period.

The contention put forth by the appellant's advocate was that they were otherwise eligible for the benefit of Notification No. 77/85-C.E., but due to availing the benefit of a previous exemption notification, they did not apply for the benefit under Notification No. 77/85-C.E. The respondent argued that the terms of Notification No. 175/86-C.E. were clear and had to be strictly construed, emphasizing the conditions laid down in Para 4 of the notification.

The Tribunal analyzed Para 4 of Notification No. 175/86-C.E., which outlined the conditions for availing the exemption, including registration as a small scale industry and the value of clearances not exceeding Rs. 7.5 lakhs. It was established that the appellants did not meet the criteria specified in the notification and had exceeded the clearance value during the relevant period.

The Tribunal upheld the decision of the Collector of Central Excise (Appeals) in rejecting the appellant's claim for the benefit under Notification No. 175/86-C.E. The Collector's decision was deemed appropriate as the appellants had not fulfilled the conditions specified in Para 4 of the notification. It was emphasized that exemptions involving revenue sacrifice must be applied for and met with the requisite conditions, which the appellants failed to satisfy in this case.

In conclusion, considering all relevant factors, the Tribunal found no error in the Collector's decision and consequently dismissed the appeal, affirming the rejection of the benefit under Notification No. 175/86-C.E.