2003 (11) TMI 455 - AT - Central Excise

Manufacturer bound by tax benefit choice under Notification No. 9/99-C.E. for financial year

The Tribunal held that once a manufacturer opts for the benefit of Notification No. 9/99-C.E., they cannot withdraw from it during the remaining part of ... Exercise of option for exemption under SSI notification - Irrevocability of option during the financial year - Interpretation of exemption notifications by plain meaning rule in taxing statutes - Effect of filing fresh declaration after opting for exemptionExercise of option for exemption under SSI notification - Irrevocability of option during the financial year - Effect of filing fresh declaration after opting for exemption - Whether a manufacturer who has exercised the option to avail exemption under Notification No. 9/99-C.E. can withdraw that option during the same financial year by subsequently filing a fresh declaration and paying duty at the normal rate. - HELD THAT: - Condition 2(i) of Notification No. 9/99-C.E. requires that a manufacturer exercise the option in writing before first clearance and provides that the option, once exercised, shall be effective from the date of exercise and 'shall not be withdrawn during the remaining part of the financial year.' The Tribunal applied the principle that exemption notifications in taxing statutes must be construed by the plain language employed, with no room for intendment, relying on the Supreme Court authority cited in the judgment. On that construction, once the assessee opted to avail the benefit of the notification from 1-4-1999, the option became irrevocable for the rest of that financial year; subsequent filing of a fresh declaration and payment of duty at the normal rate does not constitute a permissible withdrawal of the earlier exercised option under the notification's terms. The Tribunal therefore concluded that the Commissioner (Appeals) erred in allowing the appeal of the respondent and that the Revenue's contention that the option could not be withdrawn during the financial year is correct. [Paras 7, 8, 9, 10]The option once exercised under Notification No. 9/99-C.E. cannot be withdrawn during the remaining part of the financial year; the impugned order is set aside and the Revenue's appeal is allowed.Final Conclusion: The Tribunal allowed the Revenue's appeal, holding that a manufacturer who exercised the option under Notification No. 9/99-C.E. is bound by that option for the remainder of the financial year and cannot withdraw it by filing a fresh declaration and paying duty at the normal rate. Issues:Interpretation of Notification No. 9/99-C.E. regarding withdrawal of benefit during the financial year.Analysis:The appeal was filed against the Order-in-Appeal passed by the Commissioner (Appeals) by the respondents who are engaged in the manufacture of copper winding and bare copper wire. They opted for availing the benefit of Notification No. 9/99-C.E. and started clearing excisable goods under the SSI Notification from 1-4-1999. Subsequently, from 1-9-1999, they began paying duty at the normal rate after filing a fresh declaration. The adjudicating authority held that once the benefit of the notification was opted for in a financial year, the manufacturer cannot withdraw from it. The respondents appealed, and the Commissioner (Appeals) ruled in their favor.The Revenue contended that as per condition 2(i) of Notification No. 9/99-C.E., a manufacturer cannot withdraw from the notification once the option is exercised for the remaining part of the financial year. On the other hand, the respondents argued that by filing a fresh declaration and paying duty at the normal rate, they did not withdraw from the notification's benefit.The Tribunal examined the language of condition 2(i) of Notification No. 9/99-C.E., which states that the option once exercised cannot be withdrawn during the remaining part of the financial year. Referring to the decision of the Hon'ble Supreme Court in Novopan India Ltd. v. CCE, Hyderabad, the Tribunal emphasized that notifications must be interpreted based on the clear meaning of the words used, without room for intendment. The Supreme Court's decision highlighted the importance of adhering to the plain terms of exemptions in taxing statutes.Based on the Supreme Court's decision and the clear language of the notification, the Tribunal concluded that once a manufacturer opts for the benefit of Notification No. 9/99-C.E., they are bound by its terms for the entire financial year. Therefore, the impugned order was set aside, and the appeal of the Revenue was allowed.