SSI exemption claim sustained where lower duty was paid and provisional registration showed a prima facie case for stay

Omission to refer to the exemption notification in a classification list did not by itself defeat eligibility for small-scale industry exemption where duty was in fact paid at the lower SSI rate. A personal hearing was required before an adverse rejection affecting the assessee's rights on the classification list. For stay purposes, a provisional SSI registration certificate issued to a new unit was treated as sufficient to disclose a prima facie claim under the exemption notification.

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Issues: Whether stay should be granted where the assessee had shown the statutory rate in the classification list but had actually paid duty at the exempted small-scale industry rate, and whether denial of exemption without giving a personal hearing and in the context of a provisional SSI registration certificate disclosed a prima facie case.

Analysis: The classification list did not mention the exemption notification, but that omission by itself did not disqualify the assessee from the benefit if it was otherwise eligible. The fact that duty had actually been paid at the lower rate applicable to small-scale units was treated as a substantive claim to the benefit. Since the adverse decision on the classification list affected the assessee's rights, a personal hearing ought to have been given before rejection. The notification required registration as a small-scale industry, and a provisional registration certificate issued to a new unit was considered sufficient to establish a prima facie claim for the purpose of stay.

Conclusion: Stay was granted in favour of the assessee.

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