Customs, Excise and Gold Tribunal - Mumbai
Commissioner Of Central Excise vs Bharat Automatics on 5 April, 1999
Equivalent citations: 1999ECR994(TRI.-MUMBAI), 1999(112)ELT387(TRI-MUMBAI)
ORDER Gowri Shankar, Member (T)
1. The assessee, the respondent to this appeal was availing of the benefit under Notification 175/86, in the financial year 1991-92. It normally continued to avail notification in the next financial year. On 31-3-1992 Notification 55/92 was issued. This notification substituted, inter alia the second proviso to paragraph 4 of the notification. A further Notification No. 67/92 issued on 22-5-1992 added a third proviso to paragraph 4 declaring that nothing contained in the second proviso shall apply on and from 22nd May, 1992 to 31st March, 1993. Notice was issued to the assessee on the ground that the effect of these two notifications was to disqualify it from the benefit of the notification for the period from 1-4-1992 to 21-5-1992 and demanding duty accordingly payable on clearance during this period. The Assistant Collector accepted the contention of the assessee that these amendments did not have the effect disqualifying for the benefit of the notification and dropping the proceedings. The Department carried the matter in appeal to the Collector (Appeals). That authority found that no material was produced by the Department to warrant interference with the Assistant Collector's order and confirmed it. Hence this appeal.
2. We have heard the departmental representative and perused the papers. Respondent is absent and unrepresented despite notice.
3. It is necessary to set out paragraph 4 of Notification 175/86 prior to the amendment and the two amending notifications. They read as under :-
Notification 175/86"4. The exemption contained in this notification shall be applicable only to a factory which is an undertaking registered with the Director of Industries in any State or the Development Commissioner (Small Scale Industries) as a small scale industry under the provisions of the Industries (Development and Regulation) Act, 1951 (65 of 1951):
Provided that nothing contained in this paragraph shall be applicable, -
(a) in a case where the value of clearances from a factory during the preceding financial year or in the current financial year did not exceed or is not likely to exceed rupees seven and a half lakhs; or
(b) in a case where a manufacturer who is manufacturing specified goods in a factory, other than a factory which is registered under the Industries (Development and Regulation) 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 years 1987-88 and 1988-89 did not exceed rupees one hundred and fifty lakhs.
Notification 55/92In the said notification, -
(a) in paragraph 4, for the second proviso, the following proviso shall be substituted, namely:-
"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 has availed of the exemption in pursuance of Clause (a) of the said proviso in any of the preceding financial years.";
(b) proviso to paragraph 5 shall be omitted;
(c) in paragraph 7, in the second proviso, for the words "Khadi and Village Industries Commission or of the State Khadi and Village Industries Board", the words Khadi and Village Industries Commission, the State Khadi and Village Industries Board, the National Small Industries Corporation or the State Small Industries Development Corporation shall be substituted. This notification shall come into force from the 1st day of April, 1992.Notification No. 67/92
In the said notification, in paragraph 4, after the second proviso, the following shall be inserted, namely :-
"Provided also that nothing contained in the preceding proviso shall apply on and from 22nd day of May, 1992 to the 31st day of March, 1993".
An analysis of these provisions shows them to be components of following ingredients :-
(1) The exemption in the notification is only applicable to a factory registered as a small scale industry under the Industries (Development Regulation) Act, 1951 (para 4).
(2) The above condition will not apply in a case where value of clearances from a factory in the preceding financial year did not exceed, or value of clearances in the financial is likely to exceed Rs.7.5 lakhs.
(3) The condition will also not apply to a manufacturer, if the factory is not registered under the Industries (Development and Regulation) Act with the Directorate General of Technical Development and has been availing of the notification in the preceding financial year.
(4) The benefit of the relaxation mentioned in para 4 above will not be available to a manufacturer registered under the Industries (Development and Regulation) Act with the Directorate General of Technical Development who has availed of the exemption during 1986-87 and aggregate value of whose clearances in 1987-88 and 1988-89 will exceed Rs.1.5 crores.
(5) From 1-4-1992 onwards -
The benefit specified in para 3 above will not be available where the manufacturer has availed of the exemption in terms of Clause (a) of the proviso to para 4 in preceding financial year.
(6) From 22-5-1992 onwards -
The limitation specified in para 5 will not apply till end of the financial year.
4. It is evident from this that the amendment carried out by Notification 55/92 that it did away with the relaxation of the condition of registration as a small scale industry, contained in Clause (b) of the proviso to para 4 in the case of manufacturers who had at any time availed of the exemption in terms of Clause (a) of the proviso. In other words the benefit of the notification was not available to any manufacturer not registered as a small scale industry, whose clearances exceeded Rs. 7.5 lakhs in the preceding financial year or was likely to exceed in the current financial year, if such a manufacturer had at any time availed of the exemption under Clause (a) of the proviso. It would therefore follow that if such a manufacturer had availed of the notification, not under Clause (a), but by virtue of having been registered as a small scale industry, under Clause (b) as it stood earlier, the amendment did not have the effect disqualifying for the notification.
5. In reply to the notice the assessee had contended that it had not at any time availed of the notification by resorting to the exemption from registration as a small scale industry contained in Clause (a) of the proviso to paragraph 4. It was contended that it availed of the benefit in terms of Clause (b) of the proviso to paragraph 4. This proviso entitled the assessee to avail of the notification even if he was not registered as small scale industry if he had been availing of the benefit of the small scale notification issued to cover specific industries which were in existence prior to issue of notification on 1-3-1986. Clause (b) of the proviso was amended but shall with the condition of the registration of para 4 not apply to the manufacturer who had in the preceding financial year been availing of the benefit of Notification 175/86. This position continued till the proviso was again replaced to read as in paragraph 3 above.
6. This is the reason the Assistant Collector had given for not denying the benefit. He specifically recorded that the assessee continued to avail of the benefit under Clause (b) of the proviso to para 4 and the amendment made by Notification 55/92 would not affect such an assessee. Collector (Appeals) had confirmed this view, noting that no material was produced before him to say that this conclusion of the Assistant Collector was not correct.
7. The departmental representative says that the appeal is based on the intention behind the issue of amending Notification 55/92 that the benefit will not be available to any small scale manufacturer who is not registered with the appropriate authority. He cites in support the decision of the Tribunal in C.C.E. v. Ideal Graphic Industries & Chaitra Mudranalaya - 1998 (29) RLT 246 and Duropolyprene (P) Ltd. v. C.C.E. -1998 (101) E.L.T. 475. The assessee unrepresented before the Tribunal in the first decision cited by him. It appears that the contention raised before us, that the assessee had availed benefit of the notification throughout the preceding financial years by virtue of Clause (a) and Clause (b) to the proviso was not argued, and hence not considered by the Tribunal. That decision, therefore, will have to be distinguished on facts. In the second decision also this plea was not taken before the Tribunal. On the contrary, the bench has recorded a clear admission of the appellant in para 3.2 that there is no dispute that after the amendment of the Notification 55/92 the benefit would not be available to the appellant because it was registered with DGTD. The assessee in the case before us is not also registered with DGTD. Both these decisions are therefore different in facts.
On the other hand the decision of the Tribunal in C.C.E. v. P.M. Industries and Ors. -1998 (28) RLT 215 is on similar facts and its ratio will, therefore, apply.
8. We therefore see no reason to interfere. Appeal dismissed.