2000 (7) TMI 472 - AT - Central Excise

Summary

Issues:
1. Interpretation of deemed credit benefit under Notification No. 1/93-C.E. after crossing the exemption limit of Rs. 75 lakhs.

Analysis:
The case involved a reference application by the Commissioner of Central Excise, Chandigarh, regarding the interpretation of deemed credit benefit under Notification No. 1/93-C.E. The respondents were availing the benefit of the notification and deemed Modvat credit facility even after exceeding the exemption limit of Rs. 75 lakhs. The Department contended that the assessee was not entitled to the deemed credit after crossing the exemption limit. The Dy. Commissioner and the Commissioner (Appeals) had differing views on the matter. The Tribunal, in a previous decision, had held that Modvat credit was admissible even after crossing the exemption limit. However, a reference was made to the Punjab & Haryana High Court due to conflicting interpretations of the relevant words in the notification.

The Tribunal considered the arguments presented by the Revenue and noted a previous decision where it was held that deemed Modvat credit was not available to a unit after crossing the exemption limit of Rs. 75 lakhs. The crucial point of contention was the interpretation of the words 'availing of the exemption under Notification No. 1/93-C.E.' The Tribunal acknowledged the two possible interpretations of these words, leading to conflicting decisions within the Tribunal itself. Ultimately, the Tribunal decided that a point of law indeed arose from this issue. Consequently, a statement of the case was directed to be prepared and sent to the Punjab & Haryana High Court for an authoritative interpretation of the relevant words in the notification.

In conclusion, the judgment revolved around the conflicting interpretations of the deemed credit benefit under Notification No. 1/93-C.E. when a unit crosses the exemption limit of Rs. 75 lakhs. The Tribunal's decision to refer the matter to the High Court for clarification highlights the significance of a consistent and precise interpretation of legal provisions to ensure uniform application and avoid discrepancies in the application of tax benefits and liabilities.