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2016 (8) TMI 887 - AT - Central ExciseCenvat credit - benefit of Notification No. 1/93 - assessee was not registered with the Directorate of Industries of the Development Commissioner (SSI) as a small scale manufacturer - Held that - even if the assessee claimed the benefit of clause 1 in the classification list, which was admittedly not available to them, the benefit of clause 2 of the notification cannot be denied to them. After availing the exemption in respect of first clearance of aggregate value of ₹ 10 lakh, the appellant started availing the cenvat credit of duty paid on the inputs and started paying full tariff rate on their final product. Such course of action adopted by the appellant cannot be faulted upon. Clause 2 clearly permits the assessee to do so. Therefore, credit cannot be denied. - Decided in favour of assessee
Issues: Classification under notification No. 1/93 for exemption to Small Scale Industries.
In this case, the appellant, engaged in the manufacture of PVC compound and PVC master batches, claimed the benefit of notification No. 1/93, which grants exemption to Small Scale Industries. The notification allows non-duty paid clearance up to a certain limit if the factory is registered with the Directorate of Industries as a small scale industry. The Revenue contended that the appellant was not registered as a small scale manufacturer, thus not eligible for the exemption. Additionally, the authorities argued that the benefit under clause 2 of the notification was not available as the appellant had never claimed it. Upon reviewing the grounds presented by the Revenue, the Tribunal noted that even if the appellant had erroneously claimed the benefit under clause 1, which was not applicable to them, they were still entitled to the benefit under clause 2. The appellant had availed the exemption for the initial clearance value and then started paying full duty on subsequent clearances while claiming cenvat credit, which was permissible under clause 2. The Tribunal found no fault in the appellant's actions and held that the benefit under clause 2 could not be denied to them. Consequently, the impugned order was set aside, and the appeal was allowed with consequential relief granted to the appellant.
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