2000 (5) TMI 69 - AT - Central Excise

Tribunal interprets notification amendment, applies benefit from specific date, dismisses cross objection.

The tribunal reversed the appellate authority's decision and restored the adjudicating authority's order, allowing the appeal based on the effective date ... SSI exemption Issues:1. Interpretation of the effective date of an amendment to a notification under the Central Excise Act.2. Eligibility of a manufacturer for exemption under Notification No. 175/86-C.E. dated 1-3-1986.Issue 1: Interpretation of the effective date of an amendment to a notification under the Central Excise Act.The appeal involved a question regarding the effective date of an amendment made under Notification No. 119/89-C.E., dated 27-4-1989 to the earlier Notification No. 175/86-C.E., dated 1-3-1986. The issue was whether the amendment was effective from the date of notification or retrospectively from 1-4-1989. The contention was that the benefit of the amended notification should apply from the beginning of the financial year, enabling the manufacturer to claim exemption for clearances made between 1-4-1989 and 27-4-1989. The adjudicating authority initially held that the manufacturer was not eligible for the benefit of the notification for the financial year 1989-90 due to exceeding the limit in the preceding financial year. However, the appellate authority disagreed, stating that the manufacturer was indeed eligible based on the value of clearances in the preceding financial year.Issue 2: Eligibility of a manufacturer for exemption under Notification No. 175/86-C.E. dated 1-3-1986.The primary issue was whether the manufacturer was entitled to the benefit of exemption as a small-scale industrial unit under Notification No. 175/86-C.E. dated 1-3-1986 during the year 1989-90. The manufacturer argued that the enhanced turnover limit of Rs. 200 lacs in the amended notification should apply to the clearances made in the succeeding financial year 1989-90. However, the tribunal held that the benefit of the subsequent notification would only apply from the date of notification, i.e., 27-4-1989, based on the General Clauses Act defining the financial year starting from 1st April. The tribunal concluded that the law stated by a previous bench decision was correct in this regard.In conclusion, the tribunal reversed the appellate authority's decision and restored the adjudicating authority's order, allowing the appeal based on the effective date interpretation of the notification amendment. Additionally, the cross objection filed by another party was dismissed for lacking merit.