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TMI Blog2000 (6) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... is Tribunal held that Notification No. 55/92-C.E., dated 31-3-1992 did not affect enjoyment of the benefit of clause (b) ibid by an unregistered SSI unit. In other words, the benefit of exemption under Notification No. 175/86-C.E. as amended was available to an unregistered SSI unit for the period 1-4-1992 to 21-5-1992 where such unit had availed exemption by virtue of clause (b) ibid during the preceding financial years. On the other hand, in the case of Duropolyprene (P) Ltd. v. CCE, Calcutta-I [1998 (101) E.L.T. 475 (T)], another Bench of this Tribunal took a contrary view by holding that the effect of Notification No. 55/92 was to make clause (b) ibid inoperative w.e.f. 1-4-1992 so that any unregistered SSI unit would have to fall back on clause (a) of the first proviso to para 4 ibid for the benefit of exemption under Notification No. 175/86, which meant that the exemption would be available to the SSI unit during 1-4-1992 - 21-5-1992, if the value of clearances of specified goods during the preceding financial year (1991-92) did not exceed Rs. 7.5 lakhs. This view was followed by the Tribunal in many a case later. 3.The above conflict of decisions, which was taken note of by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to exceed rupees seven and a half lakhs; or (b) in a case where a manufacturer who is manufacturing specified goode in a factory, other than a factory which is registered under the Industries (Development and Regulations) Act, 1951 (65 of 1951) with the Directorate General of Technical Development in the Ministry of Industry, and has been availing of the exemption under this notification during the preceding financial year : Provided further that nothing contained in clause (b) of the first proviso shall apply in a case where a manufacturer who is manufacturing specified goods in a factory and is registered under the Industries (Development and Regulation) Act, 1951 (65 of 1951), with the Directorate General of Technical Development, and has availed of the exemption under this notification during the financial year 1986-87 and the aggregate value of clearances of all excisable goods during the financial year 1986-87 and 1988-89 did not exceed rupees one hundred and fifty lakhs." The following proviso was substituted for the second proviso aforesaid with effect from 1-4-1992 as per amending Notification No. 55/92-C.E. dated 31-3-1992:- "Provided further that nothing contained in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion with the Directorate of Industries as required by Para 4 of Notification 175/86-C.E. and the aggregate value of clearances made by each of them during 1991-92 exceeded Rs. 7.5 lacs. The respondents in Appeal No. E/3250/93-B had filed classification list effective from 1-4-1992 claiming the benefit of exemption under Notification No. 175/86-C.E. as amended. The jurisdictional Assistant Collector of Central Excise approved the classification list by disallowing the benefit of exemption under the said Notification (as amended) for the period 1-4-1992 to 21-5-1992 and called upon the party to clear their products only on payment of Central Excise duty for the said period. Against this order of the Assistant Collector, they preferred appeal to the Collector (Appeals). The respondents in Appeal No. E/3251/93-B had also cleared goods without payment of Central Excise duty during the period 1-4-1992 to 21-5-1992 claiming exemption under Notification No. 175/86-C.E. as amended. The department raised a demand of duty of Rs. 13,936.28 on the goods so cleared and the same was confirmed by the Assistant Collector. Against this order of the Assistant Collector, the party went in appeal to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o Para 4 of Notification No. 175/86-C.E. (as amended) should be read conjunctively. In other words, the word "or" appearing between the two clauses should be read as "and". According to learned JDR, only a conjunctive reading of the two clauses would promote the purpose of the Notification. He has, in this connection, relied on the decision of the Hon'ble Supreme Court in the case of Govindlalji Maharaj & Others v. State of Rajasthan and Others [AIR 1963 S.C. 1638], wherein the word "or" in clause (g) under Section 5(2) of the Rajasthan Nathdwara Temple Act was held to mean "and" as required by the context. Learned JDR has also relied on the decision of the Madhya Pradesh High Court in the case of Municipal Council v. Bishandas Nathusmal [AIR 1969 M.P. 147], wherein a Division Bench of the Court held thus :- "The word "and" is normally conjunctive and the word "or" is normally disjunctive but sometimes they are read as vice versa to give effect to the manifest intention of the legislature as disclosed from the context." Learned JDR further submitted that clause (a) of the first proviso to Para 4 had the effect of exempting from the requirement of SSI registration those cases wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra 4 would not accrue to them during the period 1-4-1992 to 21-5-1992, submits learned JDR. In support of these arguments, he has relied on the following decisions of the Tribunal :- (I) Duropolyprene (P) Limited v. CCE, Calcutta-I [1998 (101) E.L.T. 475 (T) ] (II) Collector of Central Excise v. Ideal Graphic Industries [1999 (111) E.L.T. 242 (T)] (III) D.B. Shingadia v. CCE, Bombay-I [1999 (32) RLT 477 (CEGAT)] (IV) Final Order No. 900/99-B dated 16-8-1999 in CCE, Mumbai v. Philips Engg. Company (V) CCE, Bombay v. Khanna Petrochem Company [1999 (108) E.L.T. 782 (T)] (VI) Final Order No. 1051/99-B dated 7-9-1999 in CCE, Mumbai v. Texocaps (VII) CCE, Bombay v. Rajco Industries [1999 (114) E.L.T. 1004] (VIII) Final Order No.1102/99-B, dated 6-10-1999 in CCE, Mumbai v. Bhagwati Steel Industries (IX) Final Order No. 1221/99-B, dated 9-11-1999 in CCE, Bombay v. Chetna Engineering. 9According to the assessees, clauses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicable only to those cases where the unregistered SSI manufacturer had taken advantage of Clause (a) of the first proviso to para 4 of Notification 175/86 during one or more of the preceding financial years. Any such manufacturer who had been availing of the exemption under Notification 1785/86 in terms of Clause (b) of the said proviso in all the preceding financial years would not be hit by the mischief of Notification 55/92. Learned advocates placed before us the following illustrations :- "Suppose in the financial year 1985-86, manufacturer "Y" has availed of the benefit of Notification 85/85. This is one of the notifications mentioned under clause (b) (as this clause stood prior to 1-4-1989) of the first proviso of para 4. Consequently, in the financial year 1986-87, manufacturer "X" will be eligible for exemption under Notification No. 175/86 under clause (b) of first proviso of para 4. Since it has availed of benefit of Notification No. 175/86 in one financial year, it will continue to avail benefit of the said notification for subsequent financial years also be successive application of para 4 (b). Such a manufacturer "Y" has never availed of the benefit of clause (a) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 92 addressed to Collectors of Central Excise on the subject of amendments to Notification No. 175/86-C.E. According to learned Counsel, this letter clarifies the Central Government's stand regarding the issue under consideration. We have perused the letter. The object of amending Notifications No. 55/92-C.E. and 67/92-C.E. has been stated in Paragraphs 3 and 4 of this letter extracted below :- It had come to notice that units which had claimed exemption"3. from the condition of registration under sub-para (a) mentioned above by virtue of their clearances not exceeding Rs. 7.5 lakhs in a year, were continuing to claim exemption in the succeeding years under aforesaid sub-para (b) even though their clearances exceeded Rs. 7.5 lakhs per year. As the same was contrary to the intention, Notification 175/86-C.E. was amended by Notification No. 55/92-C.E., dated 31-3-1992 so as to debar unregistered units which had availed of the exemption under clause (a) of paragraph 4 of the Notification No. 175/86-C.E. in any of the preceding financial years. Consequently unregistered units whose aggregate value of clearances exceeded Rs. 7.5 lakhs in the current financial year became ineligible for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t that an unregistered SSI unit which has already availed of the exemption in pursuance of clause (a) of the first proviso to para 4 in any of the preceding financial years would not be entitle to take the benefit of clause (b) of the said proviso from 1-4-1992. A relevant question of fact arises here and the same is whether the respondents had availed of the exemption in terms of Clause (a) in any of the preceding financial years i.e., up to (and including) 1991-92. But before going into this question, let us see what happened to the second proviso almost on the heels of its introduction by Notification 55/92. Amending Notification No. 67/92-C.E., added a third proviso to Para 4 making the second proviso inoperative from 22-5-1992 to 31-3-1993. It did not, prima facie, affect the operation of the second proviso for the period 1-4-1992 to 21-5-1992, which meant that, during this period (1-4-1992 to 21-5-1992), the second proviso was in force making clause (b) of the first proviso inapplicable to a case where a manufacturer had availed of the exemption in terms of Clause (a) of the first proviso in any of the preceding financial years. This is, however, a matter of controversy befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve clause after the first financial year of operation of Notification No. 175/86-C.E., dated 1-3-1986. Counsel for the respondents has submitted that they had been availing of exemption under Notifications 77/83-C.E., 83/83-C.E., 77/85-C.E. and 85/85-C.E. during the financial years 1984-85 and 1985-86. In 1986-87, they took the benefit of clause (b) of the proviso to para 4 of Notification No. 175/86-C.E. on the basis of their having availed of exemption in the preceding financial year (1985-86) under some of the notifications specified under the said clause. In 1987-88, they took similar benefit on the basis of their having availed of exemption in the preceding financial year (1986-87) under the same Notification (175/86-C.E.). Thereafter also, they continued to avail of exemption in a similar way in successive financial years. Thus, according to the respondents, they were continuously and uninterruptedly (since 1-3-86) taking advantage of clause (b) of the proviso to para 4 and never resorted to clause (a) of the proviso. 14.We note that the above facts were consistently pleaded by the assessees before the lower appellate authority and that the said authority rendered its decisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proviso to para 4 of Notification 175/86-C.E. does not warrant such a conjunctive reading of the two clauses. The decisions of the M.P. High Court [AIR 1969 MP 147] and the Supreme Court [AIR 1963 SC 1638] cited in this connection by ld. DR have only persuaded us only to read "or" as "or" between the two clauses. 16.Notification 67/92-C.E., which added the third proviso to para 4, made the second proviso (as introduced by Notification 55/92-C.E.) inoperative for a part (22-5-1992 to 31-3-1993) of the financial year 1992-93. But we have already held that the second proviso was not applicable to the respondents. Consequently, the third proviso also did not affect them. 17.Even if it be assumed that the second proviso introduced by Notification 55/92-C.E. affected the respondents' right to avail of exemption during 1992-93 in terms of clause (b) of the first proviso, the respondents were protected from the mischief of the second proviso by the third proviso (added by Notification 67/92-C.E.) which suspended the operation of the second proviso during the said period. Though, literally, the third proviso suspended the operation of the second proviso only from 22-5-1992 to 31-3-1993, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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