2000 (5) TMI 377 - AT - Central Excise

Summary

Issues involved:
1. Whether the unit will be treated as a small scale unit for availing exemption under notification No. 175/86-C.E. from the date of applying for the certificate or from the date of issue of the certificate by the competent authority.
2. Whether the exemption under SSI notification is available based on another factory of the same manufacturer being registered as an SSI unit.
3. Whether the extended period of limitation is applicable in the case.

Analysis:

Issue 1:
The appeal raised concerns regarding the eligibility of M/s. Indian Refrigeration Industries as a small scale unit for exemption under Notification No. 175/86-C.E. The appellant argued that they applied for SSI registration on 31-8-1987 and should be entitled to exemption from that date. Citing precedents, the advocate contended that the benefit should be available from the date of application, not issuance. The Tribunal agreed, emphasizing that the delay in certificate issuance should not penalize the appellant. Thus, the demand for duty from 31-8-87 was set aside.

Issue 2:
Regarding the availability of exemption based on another factory's SSI registration, the appellant argued that their Faridabad factory's registration should extend exemption to the Kirti Nagar factory. However, the Tribunal disagreed, stating that the exemption applies to the specific factory registered as an SSI unit. The proviso (b) to para 4 of Notification No. 175/86 does not extend the exemption to all factories of the same manufacturer. As a result, the demand for duty from 31-8-87 was upheld, and a reduced penalty of Rs. 25,000 was imposed.

Issue 3:
The question of the extended period of limitation was raised, with the appellant asserting that ambiguity in the proviso (b) to para 4 should preclude its application. However, the Tribunal found no ambiguity in the provision and held that the extended period of limitation applied due to the appellant's failure to discharge their SSI duty liability before 31-8-87. Consequently, the demand for duty from that date was upheld, along with the penalty.

In conclusion, the appeal was disposed of with the demand for duty from 31-8-87 being upheld, while the penalty was reduced to Rs. 25,000 considering the circumstances of the case.