SSI exemption dispute turns on whether ER-3 returns can replace the mandatory option or declaration under the notification.

SSI exemption under Notification No. 9/2003-C.E. turned on whether the prescribed option or declaration had to be filed before first clearance, and whether ER-3 returns could satisfy that requirement. One view treated regular ER-3 filings and disclosure of concessional clearances as sufficient indication of intent, so non-filing of the declaration was not fatal. The contrary view held that the declaration was a mandatory pre-condition, distinct from quarterly returns, and could not be reduced to a procedural formality. The Members recorded a difference of opinion and referred the matter for resolution by a third Member.

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Issues: Whether the appellant was entitled to SSI exemption under Notification No. 9/2003-C.E. dated 01.03.2003 despite not filing the prescribed option/declaration before first clearance, and whether ER-3 returns could substitute for the statutory declaration requirement.

Analysis: One Member held that regular filing of ER-3 returns and disclosure of concessional clearances showed the appellant's intention to avail the notification, and that mere non-filing of the declaration was not fatal. The other Member held that the option/declaration prescribed by the notification was a mandatory pre-condition to avail the exemption, that its timing and purpose were distinct from quarterly ER-3 returns, and that the requirement could not be treated as a mere procedural formality.

Outcome: The Members recorded divergent views on entitlement to the exemption and referred the matter to the Hon'ble President for nomination of a third Member to resolve the difference of opinion.

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