2000 (7) TMI 421 - AT - Central Excise

Summary

Issues:
Interpretation of Notification No. 1/93 regarding exemption on specified goods and subsequent clearances.

Analysis:
The judgment by the Appellate Tribunal CEGAT, CALCUTTA addressed the issue of small scale manufacturers availing the benefit of Notification No. 1/93 and exporting goods to Nepal on payment of duties. The Department contended that by exporting goods to Nepal on payment of duties, the manufacturers had opted not to avail the benefit of the notification and were required to pay duty at the normal rate for subsequent clearances. Show cause notices were issued, duties were confirmed, and penalties were imposed on the manufacturers. The Tribunal considered the provisions of Notification No. 1/93, specifically the Explanation in Clause (4) which granted manufacturers the option to pay duty on specified goods and not avail the exemption, leading to duty payment on subsequent clearances in the same financial year. The Tribunal noted that the exemption under the Notification applied to goods cleared for home consumption, and Explanation (V) clarified that clearances for export to Nepal should be included for computation of slab-rates but did not confer the status of clearances for home consumption to export goods. Therefore, the Tribunal concluded that the option to pay duty or avail exemption under the Notification did not apply to export goods to Nepal. Consequently, the Stay Petitions filed by the manufacturers were unconditionally allowed.

This judgment provides clarity on the interpretation of Notification No. 1/93 in the context of small scale manufacturers exporting goods to Nepal and the implications on subsequent clearances. The Tribunal emphasized the importance of understanding the specific provisions of the Notification and the conditions under which manufacturers could exercise the option to pay duty on specified goods. By analyzing the language and intent of the Notification, the Tribunal determined that the option to pay duty and subsequent duty payment did not extend to goods exported to Nepal, as they were not covered under the exemption for goods cleared for home consumption. This decision highlights the significance of precise legal interpretation in matters concerning duty exemptions and subsequent liabilities for manufacturers, ensuring that the application of such notifications is in line with the legislative intent and provisions outlined in the law.