Customs, Excise and Gold Tribunal - Delhi
Cce, Jalandhar vs Kf Beltings Pvt. Ltd. [Alongwith Appeal ... on 15 December, 2004
Equivalent citations: 2005(98)ECC730, 2005(181)ELT79(TRI-DEL)
ORDER C.N.B. Nair, Member (T)
1. These appeals raise a common issue relating to the interpretation of Notification No.8/99 Dated: 28.2.1999. Accordingly, they were heard together and are disposed of under this common order.
2. The issue raised is whether the value of gods exempted under other notifications (No.5/99 dated 28.2.1999) are to be taken into account while allowing exemption under Notification No.8/99. Notification No.8/99 granted full exemption to "first clearances upto an aggregate value not exceeding fifty lakhs rupees made on or after the first day of April of any financial year" and partial exemption (5%) in respect of "clearances upto an aggregate value not exceeding fifty lakh rupees immediately following the first clearances" The exemption is in respect of clearances of "excisable goods of the description specified in the Annexure" to the Notification. While the adjudicating authority took the view that goods exempted under Notification No.5/99 are also to be included to determine, "first clearances" and "the clearances immediately following the first clearances" etc., under notification No.8/99, the Commissioner (Appeals) took the view that goods which are exempted under other Notifications are not to be taken into account, since goods exempted under other notification are not "specified" goods in terms of Annexure to Notification No.8 of 1999. Commissioner has referred to this Tribunal's Order in CCE Vs. Sellammas Spinners 1998 (104) ELT 685 and CCE Vs. Konkoo Karunai Textiles (2002 (49) RLT) in support of the view taken by him. In the present appeals, Revenue is contending that goods exempted under other notification are also to be included in view of Clause (a) of para 3 of the Notification. Reliance is being placed on our decision in the case of Vadhere Luminaries Vs. CCE, Delhi-I (2004 (166) ELT 211 (Trib-Delhi) in support of this view.
3. We have perused the records and have considered the submissions made by both sides. A perusal of Notification No.8/99 makes it clear that the exemption is given to "clearances, specified in column (2) of the table below for home consumption of excisable goods of the description specified in the Annexure appended to this notification". The "Annexure" lists the goods as under (emphasis supplied).
"1. All goods specified in the Schedule to the Central Excise Tariff Act, 19 (5 of 1986), other than the following, namely:
(i) All goods which are chargeable to nil rate of duty or are exempt from the whole of the duty of excise leviable thereon;
It is clear from the above wordings of Annexure that goods which are chargeable to "nil" rate of duty or "five percent ad-valorem" under this notification are the goods specified in the Annexure to this notification itself and not goods which are exempt under some other notification. Table of exempted clearance is reproduced below:-
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Sl. Value of clearances Rate of
No. duty
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1 2 3
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1. First clearances upto an aggregate Nil
value not exceeding fifty Lakh
rupees made on or after the 1st day
of april in any financial year
2. Clearances upto an aggregate value Five per cent
not exceeding fifty Lakh rupees Ad-valorem
immediately following the
clearances specified against S. No.
1 above during the financial year
3. All clearances of the specified Nil
goods which are used as inputs for
further manufacture of any
specified goods within the factory
of production of the specified
goods.
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Thus, going by the operative portion of the Exemption Notification, it is clear that goods that are totally exempted under Notification No.5/99 are not to be taken into account for the purposes of granting exemptions under the table to Notification No.8/99.
4. Revenue's objection is rooted in para 3(a) of the Exemption Notification. That port of para 3 reads as under:-
"3. For the purpose of determining the aggregate value of clearances for home consumption, the following clearances shall not be taken into account, namely:
(a) Clearances, which are exempt from the whole of the excise duty leviable thereon (other than an exemption based on quantity or value of clearances) under any other notification or on which no excise duty is payable for any other reason;" (emphasis added) Thus, it is clear that para 3 relates to determining the "aggregate value of clearances" "and not for determining first. clearances" or "clearances immediately following first clearances" etc.
5. The distinction between the first clearances, next clearances etc. of the specified goods and aggregate value of clearances is very important for the administration of Notification No.8/99, because, while the exemption is to early clearances of specified goods upto a total value of Rs.1 Crore,that exemption is available only if the aggregate value of clearances of all excisable goods.... "does not exceed Rs.300 Lakhs in the preceding financial year". Thus, aggregate value of clearances is relevant only for determining the clearances of all excisable goods while clearances of specified goods alone are relevant for grant of exemption.
6. An Interpretation along the above lines alone can reach the benefit of the exemption contemplated in Notification No.8/99 to Small Scale Industry. The view canvassed by the revenue in the present appeals would imperil the exemption. The two markers under Notification No.8/99 are (i) that manufacturers with an aggregate value of clearances of Rs.300 lakhs are not eligible for the exemption at all (Sl. No. (viii) under para 2) (the ceiling of Rs. 3 Crore clearance of all excisable goods is a threshold) and (II) that exemption is available to the early clearances of specified goods in a financial year upto a value of Rs.1 year. The danger is clear if first clearances of otherwise exempted goods are taken into account for the proposed of exemption under 8/99. An assessee, while being eligible for this Small Scale Exemption (aggregate clearances of all excisable goods being less than Rs.300 Lakhs) may not get any benefit at all, if its early clearances in a financial year are of goods which were exempted under other notifications. Such an interpretation is contrary to the stated scope of the exemption. Notification states the position clearly by describing the exempted goods as "specified goods" listed in the "Annexure" to the notification. the wording of the "Annexure" also makes this position clear by excluding "all goods which are chargeable to nil rate of duty or are exempted from the whole of the duty of excise leviable thereon" (Sl. (i) under the Annexure) from the list of gods specified under notification 8/99.
7. We do not find our earlier decision in the case of Vadhera Luminaries as coming in the way of the above view we have taken, inasmuch as that decision related to computation of the "aggregate value of clearances" and not the issue raised in the present appeals.
8. In the light of what is stated above, we find no merit in the appeals of the Revenue. They fail and are rejected.