1996 (10) TMI 189 - AT - Central Excise

Tribunal upholds appellants' exemption eligibility despite rescinded notification

The Tribunal ruled in favor of the appellants, holding that the rescinding of Notification No. 167/79-C.E. did not retroactively affect the aggregate ... Value of Clearances - Computation of Issues: Interpretation of Explanation II (a) under Notification No. 77/85-C.E. for computing the value of clearances; Impact of rescinding Notification No. 167/79-C.E. on small scale exemption eligibility and duty liability calculation.Analysis:Issue 1: Interpretation of Explanation II (a) under Notification No. 77/85-C.E. for computing the value of clearances:The case involved a dispute regarding the interpretation of Explanation II (a) under Notification No. 77/85-C.E. The appellants, engaged in manufacturing steering wheels, were availing exemptions under different notifications. The crux of the issue was whether the clearances of excisable goods exempted from duty under a specific notification should be considered for calculating the aggregate value of clearances under another notification. The Explanation II (a) excluded clearances exempted based on value or quantity in a financial year from the calculation.Issue 2: Impact of rescinding Notification No. 167/79-C.E. on small scale exemption eligibility and duty liability calculation:Following the rescinding of Notification No. 167/79-C.E., the Department contended that the clearances of steering wheels under this rescinded notification should be added to the aggregate value of clearances for determining small scale exemption eligibility. The appellants argued that the rescinding notification could not retroactively affect the aggregate value of clearances for the financial year 1984-85, during which the now-rescinded notification was in force.The Tribunal analyzed the provisions and held that the rescinding notification did not impact the aggregate value of clearances during the financial year 1984-85 when the now-rescinded notification was in force. The appellants were already availing of small scale exemption under Notification No. 77/85-C.E. and were eligible based on the aggregate value of clearances determined for the previous year. The Tribunal emphasized that the rescinding notification did not disturb the eligibility criteria for the period before its issuance.In conclusion, the Tribunal set aside the Order-in-Appeal concerning the issue discussed, allowing both appeals in favor of the appellants. The judgment clarified the application of Explanation II (a) and the non-retroactive impact of a rescinded notification on small scale exemption eligibility and duty liability calculation.