Customs, Excise and Gold Tribunal - Delhi
Kinjal Electricals Pvt. Ltd. vs Commissioner Of Central Excise on 26 March, 2002
Equivalent citations: 2002(146)ELT642(TRI-DEL)
ORDER V.K. Agrawal, Member (T)
1. The issue involved in this appeal, filed by M/s. Kinjal Electronics Pvt. Ltd., is whether they can avail of S.S.I. exemption under Notification No. 8/99-CE., dated 28-2-99 in respect of some specified goods and discharge duty liability at normal tariff rate by availing Modvat credit in respect of some other goods manufactured by them.
2. Shri K.L. Rekhi, learned Consultant, submitted that the Appellants manufacture nine electrical goods; that in their Classification Declaration effective from 1-4-99, they opted for benefit of Notification No. 8/99-CE. in respect of 4 goods and in respect of remaining 5 goods they preferred to pay central excise duty at tariff rate and avail of Modvat credit of duty paid on inputs used in or in relation to manufacture of the said 5 items; that the Commissioner (Appeals), under the Impugned Order, has rejected their appeal holding that Notification No. 8/99 does not permit to split the specified goods manufactured by them and clear some goods under value based clearance exemption limit and some goods on payment of duty at normal rate.
Learned Consultant mentioned that the condition contained in para 2 of the Notification reads as under :
"A manufacturer has the option to not avail the exemption contained in this notification and instead pay the normal rate of duty on the goods cleared by him. Such option shall be exercised before effecting his first clearance at the normal rate of duty. Such option shall not be withdrawn during the remaining part of the financial year".
3. Learned Consultant mentioned that the appellants had given their option to not avail exemption in respect of 5 goods manufactured by them before effecting the clearance; that they have not withdrawn the option during the remaining part of financial year; that similar condition was also provided in Notification No. 1/93-C.E., dated 28-2-93 which came up for interpretation by the Tribunal in the case of Kamrup Industrial Gases Ltd. v. CCE, Allahabad--2000 (117) E.L.T. 734 (T) wherein it was held that non obstante clause does not debar availing of the exemption in respect of some of the products and not claiming exemption in respect of some other products. He also placed reliance on the decision of the Larger Bench of the Tribunal in the case of Franco Italian Co. Pvt. Ltd. v. CCE, Mumbai-II--2000 (120) E.L.T. 792 (Tribunal). Reliance has also been placed on the decision in the case of Collector v. Vidarbha Beverages, Final Order No. 857/98-D, dated 23-10-98 which has been confirmed by the Supreme Court as reported in 2001 (133) E.L.T. A 172.
4. Learned Consultant also contended that the Superintendent has directed them under letter dated 18-5-99 to modify the declaration filed by them for availing Modvat credit and exemption simultaneously; that Assistant Commissioner, under letter dated 31-5-99 accepted the declaration filed by them; that said Order dated 31-5-99 has not been reviewed by the Department and no appeal had been filed; that accordingly next officer cannot change the Order passed by his predecessor. Finally he submitted that in any case benefit of Notification No. 9/99-CE. will be available to the appellants in respect of all the products manufactured and cleared by them.
5. Countering the submission, Mrs. Krishna A. Mishra, learned SDK, submitted that letter dated 31-5-99 was only a communication from the Assistant Commissioner for accepting declaration filed by appellants and it was not a quasi judicial order; that accordingly there was no need to review the same under Section 35E of the Central Excise Act; that present proceedings have been initiated by issuing show cause notice to the appellant on the ground that Notification No. 8/99 is applicable to all the specified goods manufactured by an assessee and they cannot opt for a few goods only. She also relied upon the decision in the case of Plasmac Machines Manufacturing Co. Pvt. Ltd. v. CCE--1991 (51) E.L.T. 161 (S.C.) wherein Supreme Court held that there cannot be a estoppel against the statute and that excise authorities are not estopped from taking a view different from the views taken in approved classification list.
6. Learned SDR further submitted that condition contained in para 2 of the Notification No. 8/99 gives an option to a manufacturer to not avail exemption under the notification; that there is no option given in respect of the various goods manufactured by manufacturer; that there is no option available to him to select goods in respect of which exemption contained in the Notification would not be availed of by him. She also submitted that decision in the case of Franco Italian Co. Pvt. Ltd. will not be applicable to the facts of the present matter as Notification under consideration was 175/86-C.E., dated 1-3-86 which did not contain condition similar to the condition in para 2 of the Notification under consideration; that further Notification No. 175/86 provided two manners--availing the exemption or paying duty by availing Modvat credit; that now Central Govt. has issued two Notifications--8/99 under which exemption has to be availed of and 9/99 under which duty has to be paid from the very beginning. She also tried to distinguish decision in the case of Kamrup Industrial Gases by submitting that words used in Notification 1/93 are specified goods whereas para 2 of Notification No. 8/99 does not talk of specified goods but goods in general. Finally she submitted that benefit of Notification No. 9/99 may be considered if they satisfy all the conditions specified therein.
7. We have considered the submissions of both the sides. The conditions contained in para 2 of Notification No. 8/99 makes it very clear that a manufacturer has the option to not avail exemption contained in the notification No. 8/99 and pay the normal rate of duty on the goods cleared by him. The Notification gives an option to manufacturer to not to avail exemption and it does not confer any option on him to opt for availing exemption in respect of some of the goods manufactured by him and not opt for exemption in respect of other goods manufactured by him. This is evident from the fact that the Central Govt. had issued two Notifications instead of one SSI exemption Notification as was the earlier practice. Notification No. 8/99 exempts the specified goods up to Rs. 50 lakhs and provides concessional rate of duty in respect of the next clearance up to Rs. 50 lakhs. The second Notification No. 9/99 provides concessional rate of duty from beginning of the financial year. In view of this, the exemption contained in Notification No. 8/99 was made subject to the condition specified in Para 2.
8. We are of the view that each specified goods manufactured by assessee cannot be considered separately for the purpose of para 2 of the Notification. He has to opt not to avail exemption in respect of all the specified goods manufactured and cleared by him. However, as the view taken by us is different from the view taken by this Tribunal in the case of Kamrup Industrial Gases, supra, the matter is referred to the Larger Bench for consideration.