1999 (10) TMI 380 - AT - Central Excise

Tribunal Overturns Denial of SSI Exemption and Modvat Credit, Finding Errors

The Tribunal set aside the Order-in-Original, allowing the appeal and granting consequential relief. The denial of SSI exemption under Notification 175/86 ... SSI Exemption - Demand Issues:1. Denial of SSI exemption under Notification 175/86.2. Availability of Notification 175/86 and 213/86 for specific periods.3. Denial of Modvat credit.4. Issue of limitation in the show cause notice.Analysis:1. The appeal challenged an Order-in-Original confirming duty for clearances made by the appellants between March 1, 1986, and October 30, 1987, and imposing a penalty. The denial of SSI exemption under Notification 175/86 due to the absence of a Registration certificate was contested. The Tribunal referred to a previous decision in the appellants' favor regarding SSI registration, deeming the certificate effective from March 19, 1985. As the demand was based on the lack of an SSI Certificate from March 1, 1986, the Tribunal found the denial of exemption incorrect and set it aside.2. Regarding the availability of Notification 175/86 and 213/86, the Tribunal found errors in the impugned order. It noted that Notification 175/86 was in force until March 24, 1986, and should have been applicable for the period from March 1, 1986, to March 24, 1986. For the subsequent period, Notification 213/86 was in effect, as per a previous Tribunal decision. The Tribunal concluded that the denial of exemption based on the unavailability of these notifications was incorrect and set it aside.3. The denial of Modvat credit due to the failure to file a declaration under Rule 57G was challenged on the grounds of the demand being time-barred. The Tribunal agreed that the demand, raised well after the statutory period, lacked suppression and thus could not invoke the extended period. Consequently, the demand for Modvat credit was deemed time-barred and set aside.4. Lastly, the issue of limitation in the show cause notice, dated April 28, 1989, covering the period from March 1, 1986, to October 30, 1987, was raised. The appellants argued that all necessary statutory returns had been filed, and there was no suppression of information. The Tribunal agreed that the demand was hit by the time limit, as the extended period could not be invoked without evidence of suppression. Therefore, the entire demand was set aside based on the findings in the analysis.In conclusion, the Tribunal set aside the Order-in-Original, allowed the appeal, and granted consequential relief in accordance with the law.