Provisional small scale industry registration can support exemption where a trade notice permits acceptance before permanent certification.

Provisional small scale industry registration could support exemption under Notification No. 175/86-C.E. where the unit was recognised by the competent State authority and a trade notice permitted acceptance of provisional registration after verification. The absence of conversion into a permanent certificate was not treated as fatal to the exemption claim. The operative principle is that, for the notification, provisional registration may suffice when the relevant administrative notice expressly allows its use for duty concession.

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Issues: Whether a unit having provisional small scale industry registration could claim exemption under Notification No. 175/86-C.E. notwithstanding the absence of conversion of such registration into a permanent certificate.

Analysis: The exemption under Paragraph 4 of Notification No. 175/86-C.E. applied to factories registered as small scale industries under the Industries (Development and Regulation) Act, 1951. The assessee had provisional certificates issued by the State authorities recognising it as a small scale industry, and the department did not dispute that such provisional registration had been granted by the competent authority. A trade notice issued by the Collectorate specifically provided that provisional registration from State Government authorities could be accepted for availment of the duty concession under the notification after proper verification. In these circumstances, the absence of conversion into a permanent certificate was not treated as fatal to the claim.

Conclusion: The assessee was entitled to the benefit of the exemption notification on the basis of provisional small scale industry registration.

Ratio Decidendi: Where the relevant trade notice permits acceptance of provisional small scale industry registration for exemption under the notification, the benefit cannot be denied merely because the registration has not yet been converted into a permanent certificate.

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