Customs, Excise and Gold Tribunal - Delhi
Cce vs Peripherals India And Ors. on 29 July, 1993
Equivalent citations: 1994(51)ECR110(TRI.-DELHI)
ORDER S.L. Peeran, Member (J)
1. In all these appeals, a common question of law arises and hence they are all taken up for disposal as per law.
2. The short question that arises for consideration in these appeals as to whether para 4(b) of the notification No. 175/86-CE dated 1.3.1986 as amended could be denied to the appellants on the ground that the premises in question were not registered with the Directorate of Industries of any state or with the D.C. (SSI).
3. The department had issued show-cause notice to all the assessees herein asking them to explain as to why the benefit of the notification in question should not be denied to them as the unit was not registered in the new changed address. However, it is not in dispute that the assessees were registered SSI Units and were holding the certificates.
4. The Asstt. Collector had confirmed the short levy demand and denied the benefit of notification in question on the ground that the new units had not been registered and in some cases had held that even if there is registration to the new unit, the benefit is available only from the date of amendment of the certificate incorporating the new address and therefore short levy is recoverable for the interim period when the unit did not have the registration.
5. The Id. Collector has disagreed with the Original Authority and has held in order in Appeal No. 304 & 305/91 dated 14th March 1991 in the case of Paras Electricals & Peripherals India as follows:
These two appeals as per details below involve a common issue and are being disposed of by this single order:
S.No Appeal File No. Filed by Against O/o
No. & Date
1. 21-CE/APPL/DLH/91 M/s. Paras Electricals Pvt. 206/90
Ltd. Delhi dt. 5.11.1990
2. 5-CE/APPL/DLH/91 M/s. Peripherals India, New 96/90
Delhi dt. 22.10.1990
2. I have carefully-gone through the appeals as well as the connected records of the cases, and also considered the submissions made before me during the hearing.
3. The short point for consideration in this case is whether the benefit of para 4(b) of the Notification No. 175/86 dated 1.3.1986, as amended could be denied to the appellants on the ground that the premises in question were not registered with the Directorate of Industries of any state or with the D.C.(SSI). I observe from the impugned order that there is no dispute about the fact that the appellants had another unit which is enjoying the benefit of SSI exemption and the 'manufacturer' in both the units is the same. In para 4(b) of the Notification, I find that the emphasis is undoubtedly on the "manufacturer" and not on the "factory". Unlike the main provision of para 4 of the said Notification, the proviso 4(b) requires that the manufacturer who is manufacturing the specified goods in a factory other than a factory registered under the Industries (Development & Regulation) Act, 1951 with the DGTD has been availing of the exemption under one or more of the specified notifications during the preceding financial year. As long as the manufacturer remains the same and he has been enjoying the benefit of the exemption under one of the specified Notifications during the preceding financial year, the benefit of para 4(b) cannot be denied to him. There is no provision in para 4(b) that the factory referred to in this paragraph should remain the same as it was during the preceding financial year. If this was the intention, the language of para 4(b) would have been different from what it is now in as much as the emphasis would have been on the factory and the requirement would have been that in respect of the same factory the manufacturer should have availed of the exemption under one of the specified notifications during the preceding financial year. In the absence of any such indication in the said paragraph I am unable to agree with the interpretation given by the Asstt. Collector in her order. There is no dispute about the fact that the same manufacturer was availing of the benefit of Notification No. 175/86 in the preceding financial year(s) in respect of their other unit. Therefore, the benefit of para 4(b) will be available for their second unit under consideration in this case. I should add in this context that availability of the relaxation under para 4(b) of the said notification is only one of the necessary conditions for getting the benefit of Notification No. 175/86. The appellants are eligible for getting the benefit of para 4(b) in view of the reasons given above. The benefit of Notification No. 175/86 will be available to them if otherwise due and admissible in terms of other conditions of this Notification.
4. In view of the above, I annul the order of the Asstt. Collector and order that the benefit of Notification No. 175/86 dated 1.3.1986 as amended be made available to the appellants during the relevant years if otherwise due and admissible without insisting on registration of the unit in question as an SSI unit by virtue of the relaxation granted under para 4(b) thereof. The appeal is disposed of accordingly.
In all other appeals, similar order has been passed by the Collector as above.
6. The Revenue is aggrieved with these findings and are contending in these appeals that since the party is not registered as SSI unit as required under para 4 of the notification No. 175/86 dated 1.3.1986 as amended they are not entitled to the benefit of the said notification. The assessees have also filed cross appeals.
7. We have heard Shri S.K. Sharma, Id. JDR for the Revenue and Shri Naveen Mullic, Shri J.S. Aggarwal, Shri V.K. Gupta, and Shri R.K. Khanna, Advocates/Consultants for the assessee.
8. Shri Sharma, Ld. SDR reiterated the grounds urged by the Revenue in the appeal memo.
9. Shri Naveen Mullick, Id. Advocate submitted supporting the findings relied on the following rulings.
Accura Industries v. Collector of Central Excise 1993 (46) ECR 29.
Mahaganapathi Engg. Works v. Collector of Central Excise and referring to the term 'a factory' appearing in the notification in question contended that the term refers to a single factory and the word 'a' has to be construed as "any". In this context he referred to the alphabet 'a' "the" and the meaning attached to it as given in "The World Book Dictionary Vol. I. On a reading of these words, 'a' would refer to "any" and hence if the manufacturer is having a certificate for any of the factory held by him then the benefit of the notification cannot be denied. As also the notification refers to clearances of 'one or more' factories of a manufacturer. The certificate of registration is for a manufacture and therefore, the address from the unit was shifted to the new premises is deemed to have been covered in the registration certificate originally taken. He pointed out that in all the cases in hand the units had shifted to the new premises and the change of address in the certificate has to be taken from the original date of registration of the certificate. He argued that the notification cannot be read in such a strict sense as to whittle down its effect and in this context he relied to the rulings rendered by Hon'ble Supreme Court in the case of Hargoverdan Das v. Union of India 1978 ELT J 350 : ECR C 274 SC.
Collector of Central Excise v. Ncoli Sugar Factory 1993 (65) ELT 145 SC : 1993 (46) ECR 529 (SC) Oswal Agro Mills Ltd. v. Collector of Central Excise 1993 (47) ECR 14 Vishwanath Paper Mills v. Collector of Central Excise .
10. We have carefully considered the submissions made by both the sides and also perused the rulings cited before us. We concur with the findings given by the Id. Collector in the impugned order. We also do not see any infirmity or illegality in the same. The Notification No. 175/86-CE dated 1.3.1986 as amended (paras 1 to 4 only) are reproduced below:
Exemption to first clearances of specified goods upto the value of rupees fifteen lakhs and concessional duty on subsequent clearances in the case of manufacturer having clearances not exceeding rupees one and a half crores in the preceding year. In exercise of the powers conferred by Sub-rule (1) of Rule 8 of the Central Excise Rules, 1944 and in supersession, of the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 85/85-Central Excises, dated 17th March, 1985, the Central Government hereby exempts the' excisable goods of the description specified in the Annexure below and falling under the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), hereinafter referred to as the "specified goods"), and cleared for home consumption on or after the 1st day of April in any financial year, by manufacturer from one or more factories:
a) in the case of the first clearances of the specified goods upto an aggregate value not exceeding rupees thirty lakhs,
i) in a case where a manufacturer avails of the credit of the duty paid on inputs used in the manufacture of the specified goods cleared for home consumption under Rule 57A of the said Rules, from so much of the duty of excise leviable thereon which is specified in the said Schedule (Read with any relevant notification issued under Sub-rule (1) of Rule 8 of the said Rules or Sub-section (1) of Section 5A of the Central Excises and Salt Act, 1944 (1 of 1944) and in force for the time being as is equivalent to an amount calculated at the rate of 10% ad valorem.
ii) in any other case from the whole of the duty of excise leviable thereon. Provided that the aggregate value of clearances of the specified goods under Sub-clause (ii) of this clause in respect of (any one chapter of the said Schedule), shall not exceed rupees fifteen lakhs;
b) in the case of clearances (being the clearances of the specified goods of an aggregate value not exceeding rupees sixty lakhs) immediately following the said clearances of the value specified in Clause (a) from so much of the duty of excise leviable thereon which is specified in the said Schedule (read with any relevant notification issued under Sub-rule (1) of Rule 8 of the said Rules) (for Sub-section (1) of Section 5A of the Central Excises and Salt Act, 1944 (1 of 1944) as is equivalent to an amount calculated at the rate of 10% ad valorem.
Provided that the amount of duty of excise payable on the specified goods under Sub-clause (i) of Clause (a) or, as the case may be, under this clause, shall not be less than an amount calculated at the rate of 5% ad valorem.
Provided further that the aggregate value of clearances of the specified goods in terms of Clause (a) and Clause (b) of this paragraph taken together, shall not exceed rupees seventy five lakhs.
2. The aggregate value of clearances of the specified goods from any factory by one or more manufacturers in any financial year under Clauses (a) and (b) of paragraph I, shall not exceed rupees thirty lakhs and sixty lakhs respectively:
Provided that the aggregate value of clearances of the specified goods from any factory by one or more manufacturers in any financial year in terms of Clause (a) and Clause (b) of paragraph I, taken together, shall not exceed rupees seventy five lakhs.
3. Nothing contained in this notification shall apply if the aggregate value of clearances of all excisable goods for home consumption.
a) by a manufacturer, from one or more factories, or
b) from any factory, by one or more manufacturers, had exceeded rupees one hundred and fifty lakhs in the preceding financial year.
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 olthe Industries (Development and Regulations) 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 or the exemption in terms of S.No. 39 of the Table annexed to the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 53/88-Central Excises, dated 1st March, 1988.
The effective portion of the notification makes it clear that the exemption is extended to "a manufacturer from one or more factories" a reading of para 4, as can be seen before us, it does not stipulate that the change of factory address would disentitle the assessee of the exemption or automatically cancel the registration. So long as there is a clear provision for change of address to be incorporated in the certificate of registration (that has admittedly been done in all these cases) without the certificate of registration being cancelled, the certificate is deemed to be valid from its original date. The mere fact of the delay in getting the change of address incorporated in the certificate of registration that by itself would not disentitle the manufacturer from claiming the exemption. The exemption is extended to the manufacturer having one or more factories. Therefore, the mere fact that the address was not amended in the certificate before the date of shifting to the new premises, is also not the criteria for denying the exemption. The said amendment in the certificate is a mere procedural requirement. Such a change does not whittle down the exemption or make the manufacturer disentitled to the exemption. The reasoning given by the Id. Collector is correct in law. The Tribunal in the case of Accura Industries (supra) has already held that availment of an exemption notification is independent of exemption from licensing control on filing of a declaration under notification No. 111/78 or notification 2/81. It has been further held that The fact remains that the appellants were availing of the benefit of this notification 175/86 during the preceding financial year. There is also sufficient force in the Id. Consultant's plea that the scope of the expression 'availing of the exemption' occurring in proviso (b) to para 4 of the notification 175/86 reproduced above, cannot be restricted to cases where a person has filed a declaration under Notification 111/78 or 2/81. The question whether a manufacturer was availing of the exemption would depend upon whether he was liable to avail of the exemption on the basis of the conditions set out in any of the notification listed in para 4(b) These findings also support the plea of the respondents in these appeals.
11. In the case of Collector of Central Excise v. Ncoli Sugar (supra) the Hon'ble Supreme Court has held that the exemption notification should be given their due effect, keeping in view the purpose underlying therein. The General Principles of interpretation of taxing statute has been reiterated by Hon'ble Supreme Court in the case of Oswal Agro Mills Ltd.'s case and Mis. Vishwanath Paper Mills' case cited before us.
12. We do not find any merits in these appeals and hence they are all dismissed.