SSI exemption under Notification No. 8/2003-C.E. available mid-year despite no prior written opt-out, on harmonious reading.

SSI exemption under Notification No. 8/2003-C.E. was held available from 06.05.2006 where the assessee opted to avail the exemption during the financial year. Clause 2(i) required a written option not to avail the exemption before the first clearances at normal duty, but Clause 2(ii) was read harmoniously to permit intimation of the option date and aggregate clearances up to that date. On that construction, prior written opt-out was not a bar when the assessee had in fact exercised the option to claim exemption from 06.05.2006.

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Issues: Whether the assessee was entitled to opt for SSI exemption under Notification No. 8/2003-C.E. from 06.05.2006 despite having paid duty earlier in the financial year and without filing a prior written option not to avail the exemption.

Analysis: Clause 2(i) of the notification required the option not to avail exemption to be exercised in writing before the first clearances at the normal rate of duty. Clause 2(ii), however, contemplated that while exercising the option, the manufacturer would intimate the date from which the option was exercised and the aggregate value of clearances till that date. Reading the two clauses harmoniously, the notification permitted the assessee to exercise the option during the year, and the absence of a prior written opt-out did not bar exemption where the assessee had in fact opted to avail it from 06.05.2006.

Conclusion: The assessee was entitled to SSI exemption with effect from 06.05.2006.

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