2000 (7) TMI 332 - AT - Central Excise

Summary

Issues:
- Whether the benefit of Notification No. 175/86-C.E., dated 1-3-1986 is available to the goods manufactured by the Appellants during the financial year 1989-90.

Analysis:
The appeal in question pertains to M/s Seamless Tubes & Technologies India Ltd. and revolves around the eligibility of the Appellants to avail the benefit of Notification No. 175/86-C.E. during the financial year 1989-90. The Assistant Collector, in his adjudication orders, denied the concessional rate of duty under the said notification, citing that the Appellants lost their independent identity as a Small Scale Industries (SSI) unit upon becoming a subsidiary of another company and hence, were not entitled to the notification's benefits. However, the Collector (Appeal) noted that the value of clearances by the Appellants fell within the specified limits of the notification, albeit with certain discrepancies in the figures provided. The Collector (Appeal) directed a verification of the clearances for the relevant years and ordered that the benefit of the notification be granted accordingly. Notably, the Collector (Appeal) restricted the benefit to the Appellants only for the year 1990-91, citing a specific provision (para 4(b)) that applies to units registered with the Directorate General of Technical Developments (DGTD). Since the Appellants obtained DGTD registration in 1990, the Collector (Appeal) deemed them ineligible for the benefit for the year 1989-90.

Upon careful examination, the Tribunal observed that para 4 of Notification No. 175/86 stipulates conditions for exemption, including factory registration with the DGTD as a Small Scale Industries unit. The proviso to para 4 contains exceptions, specifically clause (b), which outlines scenarios where the exemption may not apply. It states that if a manufacturer availed the exemption in the preceding financial year, the benefit shall be available even if the factory is not registered under the Industries (Development and Regulations) Act with the DGTD. In light of this provision, the Tribunal found the Collector (Appeal)'s decision regarding the Appellants' eligibility for the notification's benefit in 1989-90 erroneous. Consequently, the Tribunal remanded the matter to the Assistant Commissioner to determine the Appellants' entitlement to the Notification No. 175/86 benefits during the financial year 1989-90, thereby allowing the appeal by way of remand.