2019 (1) TMI 1030 - AT - Central Excise

Supplies effected to M/s Vidharba Irrigation Development Corporation established by an enactment of the state legislature - benefit of N/N. 74/93- CE dated 28th February 1993 - SSI Exemption - N/N. 8/2003-CE dated 1st March 2003 - Held that - The notification claimed by the respondent does, in the circumstances of a factory belonging to or maintained by a state government, consider each such factory to be independently eligible for the exemption applicable to small-scale industries - The interpretation of the intent of the sovereign legislature to consider each establishment on its own in the referred decisions requires us to follow them - appeal dismissed - decided against Revenue.

Summary

Issues:
Appeal against dropping of recovery proceedings for duty, entitlement to exemption under specific notifications, clubbing of clearances for duty liability calculation.

Analysis:
The case involved two appeals by Revenue against the dropping of recovery proceedings for duty and setting aside of duty recovery orders for specific periods. The dispute centered around the respondent, a government agency, claiming exemption under certain notifications for supplies made to another entity. The issue was whether the respondent was entitled to exemption for duty liability beyond what was already discharged. The Tribunal considered the rival contentions regarding the eligibility for exemption and the clubbing of clearances for duty calculation.

The tax authorities contended that the respondent could not claim exemption beyond the eligibility threshold for each manufacturing establishment. They relied on a Tribunal decision regarding the interpretation of notifications related to exemption eligibility for manufacturers. However, the respondent argued that the volume of clearances entitled them to exemption as examined and accepted in the impugned orders. They also cited relevant Tribunal and Supreme Court rulings to support their position on clubbing of clearances.

The Tribunal analyzed the conflicting interpretations of notifications and previous decisions. It noted that the notification claimed by the respondent allowed each factory belonging to or maintained by a state government to be independently eligible for the exemption applicable to small-scale industries. This was in contrast to the interpretation relied upon by Revenue. The Tribunal found that the intent of the legislature was to consider each establishment separately for exemption eligibility, based on the specific provisions of the notifications.

Ultimately, the Tribunal dismissed the appeals of Revenue, concluding that there was no reason to interfere with the impugned orders. The decision was pronounced in court on 18/01/2019.