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TMI Blog2003 (7) TMI 633X X X X Extracts X X X X X X X X Extracts X X X X ..... d 20-5-1994, Rule 56A was deleted from the Central Excise statute and Modvat benefit was extended to the product covered by chapter heading 54.03 by Notification No. 24/94 dated 20-5-1994. The department was of the view that since Notification No. 1/93 was effective from 1-4-1994, clearances from this date should be computed and not only from the date when the assessees/respondents opted for the benefit of the notification. On this basis, show cause notices were issued for recovery of the differential duty during the period after first clearance value of Rs. 50 lakhs was crossed. The demand was confirmed by the adjudicating authority against whose orders appeals were filed. The Commissioner (Appeals), i.e. the lower appellate authority set aside the order of the adjudication relying upon his earlier orders in which he had held as under :- The goods manufactured by the appellants had not been declared as specified goods from 1-4-1994 to 25-4-1994 under Notification No. 1/93 dated 28-2-1993. Therefore in absence of retrospective provision in the amendment Notification No. 90/94 dated 25-4-1994, the clearances made during 1-4-1994 to 24-4-1994 are not to be computed for concess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ail it and not to make it impossible or incapable of availing. Since the concessions in terms of para 1(a)(i) or (ii) of Notification 1/93 are legally available to the appellants only from 20-5-1994 and that the earlier clearances made at full rate of duty by availing the proforma credit under Rule 56A are not eligible for computing the aggregate value for the purpose of concessional duty envisaged under para 1(a)(i) or (ii), the aggregate value of clearances made prior to 20-5-1994 are not includible for working out the concessional rate of duty envisaged under Notification 1/93 as amended dated 28-2-1993. 3. The Commissioner (Appeals) also distinguished the Larger Bench decision of the Tribunal in the case of Ramakrishna Engineering Works. v. CCE, Bolpur [1996 (83) E.L.T. 346], noting that the goods under reference in that case were specified goods right from 1-4-1994, while in the appeals before him, the goods became specified goods only w.e.f. 25-4-1994, and further the respondents were covered under Rule 56A till 20-5-1994, and not under Rule 57A, and the benefit under Notification 1/93-C.E., was legally available to the respondents only from 20-5-1994, which was not the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the specified goods up to an aggregate value not exceeding rupees thirty lakhs appearing in Notification No. 1/93-C.E., dated 28-2-1993. This expression is preceded by the expression cleared for home consumption on or after the 1st day of April in any financial year . The aforesaid notification provides a general scheme of exemption to the small scale sector and applies to numerous specified goods. It is possible that one assessee may manufacture and clear more than one specified goods. The entitlement to exemption is based on annual value of clearances and rupees thirty lakhs refers to the first slab of exemption. Full exemption is available to this slab if no Modvat credit of input duty is availed under Rule 57A, otherwise the duty is reduced by 10 percentage points. 8. The issue gets a bit complicated in the case of the impugned goods which have been added to the list of specified goods w.e.f. 25-4-1994 and not from 1-4-1994. The law-makers have not made it any easier by making the impugned goods modvatable w.e.f. 20-5-1994. Till then the respondents availed input duty credit under Rule 56A and hence could not avail exemption under Notification No. 1/93-C.E. The question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (supra). 11. In the case of Gandhilon Texturisers and another v. U.O.I. (Special Civil Application No. 11966 of 2002), the Hon ble Gujarat High Court has referred to its earlier order in the case of Dhanalaxmi Texturisers - 2005 (179) E.L.T. 23 (Guj.) = 2003 (55) RLT 873 (Guj.) and has stated that the Tribunal was in error in taking a different view than the one which it had taken in the case of Watts Electronics Pvt. Ltd. v. Collector of Central Excise and in the case of Shree Cables Conductors Ltd. v. Commissioner. It is, however, pertinent that the learned counsels from either side do not appear to have brought to the notice of the Hon ble Gujarat High Court the following :- (1) Watts Electronics (supra) was no longer good law as it was over-ruled by a Larger Bench of 3 Members in Ramakrishna (supra) following the Hon ble M.P. High Court s reasoned order in B.K. Rubber Industries (supra). (2) The decision in Shree Cables and Conductors Ltd. [2001 (135) E.L.T. 1110 (Tribunal)] was rendered by the learned Single Member who had no jurisdiction to decide a case involving determination of rate of duty. (3) The said learned Single Member was also in error in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... batore v. Marutham Textiles (P) Ltd., 2003 (153) E.L.T. 219, wherein the larger bench held that amounts paid by the respondents as duty of excise on cotton yarn in that case cleared from 25-4-94 till they started availing the benefit of Notification No. 1/93-C.E., (as amended) would not be recognized as duty of excise and were to be treated as bare deposits of money lying with the Government, after following the Board s Circular No. 2/91-CX-3 dated 4-1-1991. This being the larger bench s decision, would be applicable in the facts of this case also. (b) In my opinion, the duty of excise paid from 1-4-1994 till 19-5-1994 cannot be reckoned for determining the first clearance of specified goods for home consumption in the financial year 1995-96. Similarly, if any appellant has opted subsequent to 20-5-1994 for the benefit of Notification No. 1/93-C.E., they would be entitled to the benefit of the notification as held by the Gujarat High Court in Dhanlakshmi Texturisers v. CCE, 2005 (179) E.L.T. 23 (Guj.) = 2003 (55) RLT 873 as arrived at by the learned Member (Judicial) in paragraph 5. Since the larger bench in the case of CCE, Coimbatore v. Marutham Textiles Pvt. Ltd. (supra) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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