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TMI Blog1999 (4) TMI 644X X X X Extracts X X X X X X X X Extracts X X X X ..... s per the appellants, their officers, after a lot of persuasion visited their factory for inspection towards the early part of 1988 and informed the appellant to move an application for permanent registration. Accordingly, another application was filed by the appellant firm in continuation of or as a supplementary to their earlier application filed on 3-12-1986. Thereafter, the appellants were issued a permanent registration certificate on 31-3-1988. 1.2 During the pendency of their issuance of permanent registration certificate and till the same was granted, the appellant firm availed the benefit of Notification No. 175/86-C.E., dated 1-3-1986 during the financial years, 1986-87 and 1987-88. During the period from 1986-87, though the total clearances from the appellants factory were to the tune of ₹ 21,56,779/- the appellants did not pay any duty on the entire clearances. It was only when the appellants factory was visited by the officers by the Preventive Unit of Calcutta on 19-10-1987 and 2-11-1987 and conducted various checks and verifications, it was noticed that the clearances during the year, 1986-87 had, in fact, exceeded the initial exemption-limit of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roduction. In a separate proceedings, the appellants also filed a Refund Claim of ₹ 1,07,014.86 for the period from December, 1987 to March, 1988 on the ground that the duty was payable @ 5% ad valorem in terms of the Notification No. 175/86 whereas they were compelled to pay duty by the Department at the full rate @ 15% ad valorem after the visit of the officers. Such a claim was made by the appellant firm on the ground that they were granted permanent registration certificate on 31-3-1988 and the same should be made applicable for at least the entire financial year, 1987-88. Such a Refund Claim was initially rejected by the Assistant Commissioner vide his Order-in-Original, dated 25-1-1989. 1.4 On appeal against the above order, the Commissioner (Appeals) vide his Order-in-Appeal No. 29A/CAL-I/90, dated 10-1-1990 accepted the appellants claim that the certificate of small-scale registration granted on the last day of the financial year, should be held to be available for the entire financial year inasmuch as the notification provides for exemption in a financial year on the value of clearances during that financial year, subject to the Unit being registered with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. Collector of Central Excise, Patna vide Order No. M-111, dated 6-3-1998. A separate order has been recorded by Member (Judicial) (myself) and the matter has been placed before the third Member for resolving the difference of opinion between the two Members. The relevant paragraphs of the separate order recorded by Member (Judicial) are reproduced below :- 5. The main issue involved in the said appeal is interpretation of main clause of Para 4 of Notification No. 175/86-C.E., dated 1-3-1986. There is no dispute about the factual position consisting of date of application made to the Directorate of Industries for grant of Small-Scale Registration Certificate and the date on which the same was actually granted. The short question required to be decided is as to whether the S.S.I. Certificate which was granted to the appellants herein on 31-8-1988, would be applicable from the date of its issuance and the benefit under Notification No. 175/86 would flow to the appellants from that date or would be effective from and would relate back to the date of application made by the appellants or alternatively, from the date of commencement of production which has been shown on the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or whether the requirements of the section should be held to be satisfied if the dealer holds such a recognition certificate at the time of the assessment of the turnover in question. The High Court has held that the requirements of the section are substantially complied with if the certificate is available to the dealer at the time the liability to tax of the turnover in question is sought to be determined subject to the requirement that the turnover is after the date of the application filed by the dealer for issue of a certificate. According to the High Court, the date of actual issue of the certificate should not be held to be material and that the benefit for the concessional rate of tax should be available to the dealer if the dealer, at the time of the assessment, holds a recognition certificate in respect thereof . According to the High Court the language of Section 4B does support the extreme construction that the recognition certificate should be held at the time of the purchases themselves. 18. On a consideration of the matter we are persuaded to the view that the construction placed on the provision by the High Court is an eminently plausible one. There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant firm as disclosed in their application made in December, 1987 and has been granted on the basis of the information mentioned therein. As such it cannot be said that the appellant firm was not a Small-Scale Unit in December, 1987 and had attained the status of S.S.I. Unit with effect from 31-8-1988. 8. I also find that the Orissa High Court in an another case in the case of Bhanja Bhandar v. State of Orissa reported in 1975 (37) STC 169 while considering a Reference Application has held that the dealers have to be considered as registered dealers with effect from the date of application and not from the date of grant of certificate. In that case, the application was filed on 14/16-2-1962 and the registration certificate was granted on 16-12-1962. It was observed in Para 4 of the said judgment that the petitioner was to be treated as a registered dealer with effect from 14/16-2-1962 and it cannot be said as an unregistered dealer nor can any penalty be imposed upon him. Though this case is under Sales Tax Act, nevertheless, the ratio laid down by the Honourable High Court is applicable. 9. I also take note of the Tribunal s judgments in the case of Shri G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be available to the appellant firm for the entire financial year, 1987-88 and the refund was granted on the basis of the same. Revenue has not challenged the above order of the Commissioner (Appeals). 6. In view of our foregoing discussions, we set aside the impugned order in its entirety inasmuch as there is no justification and warrant for con- fiscation of the seized goods or the imposition of penalty upon the appellant firm. Appeal is allowed with consequential reliefs to the appellant firm, if any. Sd/- (Archana Wadhwa) Member (J) 7. [Contra per : P.C. Jain, Member (T)]. - I have carefully gone through the judgment proposed by my learned Sister, Smt. Archana Wadhwa, Judicial Member. But I regret, I differ from the same having disagreed with her in the case of Foundry Chemicals (supra). 8. I could not and did not discuss the citations relied upon by the learned Sister in her judgment because the same were not cited by the learned Advocate and I wrote the leading judgment in that case of Foundry Chemicals (supra). Two cases have been relied upon in the separate judgment of the learned Judicial Member to hold that the Certif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uage of Section 4B does support the extreme construction that the recognition certificate should be held at the time of the purchases themselves. 18. On a consideration of the matter we are persuaded to the view that the construction placed on the provision by the High Court is an eminently plausible one. There is nothing basically wrong in the approach of the High Court that the statutory language does not insist upon the contemporaneity of the holding of the certificate with the purchases and that it is sufficient if the dealer, subsequently, comes to hold certificate in respect thereof . It seems possible to say that to insist upon a contemporaneity of the purchases and the certificate would also amount to qualifying the word `holds in the section by adding the words at the time of the purchases . 3.6 It would thus be observed that having regard to the language of the relevant provisions of Section 4B of the said S.T. Act and the manner of assessment of turnover tax at the end of the year, it was held that Section 4B ibid could be read as providing for holding of a recognition certificate at the time of assessment and not just at the time of purchase of raw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dry Chemicals. No general principle of law can be drawn and applied to all situations. 13. As regards reliance on some purported guideline in learned Judicial Member s judgment, it is appropriate to observe that this is a question of fact which was not stated by the learned Advocate before the Bench nor was such a plea taken in Foundry Chemicals. Lower Authorities, therefore, had no occasion to apply their mind to the said guidelines regarding their genuineness, or of competence to issue them, or on their applicability under the relevant provisions of law. It will also be moot point whether guidelines issued by one State Authority will also be applicable in another State. This question would also need to be examined. 14. In view of the foregoing discussions, I hold that ratio of Apex Court s ruling in Haji Ismail Mohd. and of Orissa High Court in Bhanja Bhandar are not applicable in the present case. 15. As regards the `guidelines , since it will be in the nature of fresh evidence, this matter could have been brought on record only through an application for additional evidence. No such application is found to be on record in Foundry Chemicals. Nor for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal may, of its own motion, call for any documents or summon any witness on points at issue, if it considers necessary to meet the ends of justice. He contended that as this clarification issued by Joint Director of Industries clarifies a legal position, it is in the interest of justice that such an evidence is admitted. Further he placed heavy reliance on the decision in the case of State of U.P. v. Haji Ismail Noor Mohammed Co. - 1988 (3) Supreme Court Cases, 398 in which the Apex Court held that the statutory language of the Sales Tax Act does not insist upon the contemporaneity of the holding the certificate with the purchase and that it is sufficient if the dealer, subsequently, comes to hold certificate in respect thereof ; and submitted that the ratio of the judgment is applicable to the facts of the case as the SSI certificate has been issued to the appellants; that the contention that in Haji Ismail case, Section 4B of the Sale Tax Act provided for holding of a recognition certificate at the time of assessment and not just at the time of purchase of raw material is not relevant. The question in the present matter is whether the Appellant was registered as a S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of Mihir Textiles v. C.C., Bombay - 1997 (92) E.L.T. 9 (S.C.) is relevant in which it was held that when exemption is dependent upon satisfaction of certain conditions, it cannot be granted unless such conditions are complied with. Finally he submitted that the guidelines was not issued by the competent authority, namely, Director of Industries who is specified in the notification; that even if certificate is to be given retrospective effect, it cannot be given retrospective effect prior to date of application i.e. 3-12-1986. 21. In reply, Shri D.B. Desai submitted that the legal principle is that what is apparent is true unless proved to the contrary. Therefore, the burden to prove that S.S.I. registration was not there is on the department. The decision in the case of Dixit Desai v. C.C.E. - 1997 (92) E.L.T. 138, relied upon by the ld. SDR has no relevance to the present matter as there is no ambiguity. The benefit of notification cannot be denied by circuitous process of interpretation. 22. I have considered the submissions made by both the sides. It is not in dispute that the appellants had applied for provisional Certificate of Registration as S.S.I. on 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ries, West Bengal, the decision in the case of Magna Vision Electronics, (supra) to the effect the certificate is valid only from the date of issue is not applicable. On the other hand, that decision supports the case of the appellants as in that case the Tribunal held the view as there was nothing in the certificate to show that the certificate was valid for the period prior to the date of issue. Such is not the case in the present matter on account of clarification about the validity of certificate from the date of production. In Kutch Cement (P) Ltd. case the facts were different inasmuch as the appellants therein were a registered DGTD unit and their status can be said to have changed only from the date of grant of SSI certificate. Further the Director of Industries did not extend any benefit as to the retrospective application of the certificate. I am of the view that the delay on the part of the certificate issuing authority should not affect the availment of benefit of notification by the assessee. I, therefore, agree with the view of the ld. Member (Judicial) that the appellants firm would be entitled to the benefit of Small Scale exemption from the date of application. At ..... X X X X Extracts X X X X X X X X Extracts X X X X
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