2000 (8) TMI 341 - AT - Central Excise

Summary

Issues:
1. Interpretation of whether deemed credit benefit under Government of India's Order No. TS/36/94-TRU dated 1-3-94 could be availed by a unit after exhausting the limit of Rs. 75 lakhs under Notification No. 1/93-CX.
2. Admissibility of Modvat credit to a unit enjoying the benefit of Notification No. 1/93 after crossing the aggregate value of clearances of Rs. 75 lakhs.
3. Determination of whether a unit can still be considered availing exemption under Notification No. 1/93-CX after exceeding the limit of Rs. 75 lakhs.

Analysis:

1. The Appellate Tribunal considered the Revenue's application seeking a reference to the Hon'ble High Court of M.P. regarding the interpretation of the deemed credit benefit under Government of India's Order No. TS/36/94-TRU dated 1-3-94. The Tribunal analyzed whether this benefit could be availed by a unit after surpassing the Rs. 75 lakhs limit under Notification No. 1/93-CX. The Tribunal referred to previous judgments and held that as long as the unit qualifies as an SSI unit under Notification No. 1/93-CE, it is entitled to the benefit of deemed Modvat credit even after exceeding the Rs. 75 lakhs limit. The impugned order was upheld, and the appeal was rejected, along with the disposal of cross-objections in the same terms.

2. The case involved a dispute regarding the admissibility of Modvat credit to a unit benefiting from Notification No. 1/93 after crossing the aggregate value of clearances of Rs. 75 lakhs. The authorities below had ruled against allowing Modvat credit in such a scenario. However, the Tribunal examined the specific wording of Government of India's Order dated 1-3-94 and concluded that the benefit of deemed Modvat credit remains available to the unit even after surpassing the Rs. 75 lakhs limit under Notification No. 1/93-CE. The Tribunal emphasized that as long as the unit retains its status as an SSI unit under the notification, it can continue to enjoy the benefit of deemed Modvat credit.

3. The Tribunal addressed the question of whether a unit could still be considered as availing exemption under Notification No. 1/93-CX after exceeding the limit of Rs. 75 lakhs in aggregate clearances. The crucial issue revolved around the interpretation of the term "availing exemption" in the notification. The Tribunal noted that once the unit surpasses the Rs. 75 lakhs limit, it cannot be deemed to be availing exemption under the said notification. Consequently, a point of law arose as to whether the unit could still be classified as availing the exemption. The matter was referred to the Hon'ble M.P. High Court at Jabalpur for further deliberation and a legal opinion on this specific issue.