2000 (4) TMI 284 - AT - Central Excise

Summary

Issues:
Calculation of exemption extent for a manufacturer producing goods under multiple headings when clearances exceed the exemption limit under one heading but not overall.

Analysis:
The appeal raised the issue of calculating the exemption extent for a manufacturer producing goods under various headings when clearances exceeded the exemption limit under one heading but not overall. The Collector of Central Excise (Appeals) had opined that paying excise duty on clearances exceeding Rs. 20 lakh under one heading entitles the manufacturer to exemption for other headings until the overall exempted clearances surpass Rs. 30 lakh. The matter proceeded for consideration despite the absence of respondents, with the notice issued in 2000 for a case originating in 1992. Referring to a Tribunal decision in a similar case, it was highlighted that the exemption for small-scale units up to Rs. 30 lakh applied to clearances in chronological order, including those on payment of duty.

The facts presented in the appeal by the Revenue outlined a scenario where a manufacturer, M/s. A.M.A. Extrusions, Nagpur, produced goods under various chapters with clearances exceeding Rs. 20 lakh under Chapter 76 but not exceeding Rs. 30 lakh overall. The Collector of Central Excise (Appeals) considered previous Tribunal decisions, including those in the cases of Purushotham Goculdas Plywood Co. and Premier Rubber and Trades, along with Royal Coffee Works. A Supreme Court case involving the Collector of Central Excise, Chandigarh, was also mentioned, where the Court dismissed the Civil Appeal against a CEGAT order, reinforcing the interpretation that specified goods exceeding a certain value under one heading do not affect the exemption for other goods until the aggregate ceiling is reached.

Given the settled matter by the Supreme Court and in line with previous decisions, the Appellate Tribunal rejected the Revenue's appeal, affirming the Collector of Central Excise (Appeals) view on the calculation of exemption extent for manufacturers producing goods under multiple headings. The Tribunal upheld the principle that even if clearances under a specific heading exceed the exemption limit, other goods can continue to enjoy exemption until the aggregate ceiling is reached, as established in earlier Tribunal decisions and reinforced by the Supreme Court's judgment.