1998 (4) TMI 143 - SC - Central Excise

Manufacturing company wins excise duty exemption case based on production value and goods classification.

The Supreme Court upheld the decision of the Customs, Excise & Gold (Control) Appellate Tribunal, ruling in favor of a manufacturing company's ... SSI Exemption Issues:- Interpretation of exemption from excise duty under Notification No. 71/78 for a manufacturing company producing goods falling under different tariff items.Analysis:The Supreme Court heard an appeal by the Revenue challenging the judgment of the Customs, Excise & Gold (Control) Appellate Tribunal regarding the entitlement of a manufacturing company to avail the benefit of exemption from excise duty under Notification No. 71/78. The key issue was whether the respondent-company, manufacturing motor vehicle parts falling under different tariff items, could benefit from the exemption. The Tribunal, following a precedent from the Calcutta High Court, ruled in favor of the respondent, stating that since the total production value did not exceed Rs. 20,00,000/- and the goods fell under multiple item numbers, the exemption applied.The respondent's counsel highlighted a previous judgment by a Single Judge of the Calcutta High Court, which was upheld by a Division Bench and subsequently dismissed by the Supreme Court. The Supreme Court referred to a previous case involving Notification No. 80/80, similar to Notification No. 71/78, where the issue of manufacturing different specified goods was considered. The Court determined that in such cases, the exemption clause applicable would depend on the nature of goods produced. As the respondent in the present case manufactured both specified and other goods, it was correctly held to fall under Clause (iii) of Notification No. 71/78.Considering the precedents and the nature of goods produced by the respondent, the Supreme Court found no merit in the Revenue's appeal and dismissed it. The Court made no order regarding costs, concluding the matter.