TaxTMI 
TaxTMI 
1996 (2) TMI 208
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....n granted under Notification No. 175/86-C.E., dated 1-3-1986 as amended according to which, they are entitled to exemption of duty in respect of first clearances upto the value of Rs. 30 lacs and to concessional rate of duty beyond Rs. 30 lacs but subject to a limit. The dispute in these appeals relates to the interpretation of the words "first clearances". 3. We will briefly refer to the facts of these cases. E. 289/90 : Appellant is manufacturer of chain conveyer (Headings 8428.00) and coal tubes (Heading 8609.00). Appellant availed of the exemption in regard to clearances of coal tubes of the value of Rs. 15 lacs and thereafter, cleared coal tubes on payment of duty. Appellant also cleared chain conveyers free of duty. If the value of coal tubes cleared on payment of duty (after clearing free of duty up to Rs. 15 lakhs is to be reckoned for computing the limit of Rs. 30 lacs, appellant would not be entitled to duty free clearance of chain conveyers upto the limit of Rs. 15 lacs less the value of coal tubes cleared on payment of duty. The dispute related to the clearance of chain conveyers made on 28-11-1986 quoting a particular value which was found to be under-valuation t....
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....t. Collector held against the manufacturer, but the Collector (Appeals) upheld the manufacturers contention. Hence, this appeal has been filed by the Collector. E/4423/94 : On more or less similar facts, the Asstt. Collector held in favour of the manufacturer but that was reversed by the Collector (Appeals). The Collector (Appeals) set aside the order passed in favour of the manufacturer. This appeal has been filed by the manufacturer. 4. We will now advert to the decisions of the Tribunal on the questions arising in this case. The earliest decision appears to be one in EL. P. EM. Industries v. Collector of Central Excise - 1989 (43) E.L.T. 599 (T). A similar contention of the manufacturer was upheld by the South Regional Bench. The Bench took the view that value of clearances of one category of goods beyond the limit of Rs. 15 lakhs on payment of duty is not to be reckoned for the purpose of computing the ceiling of Rs. 30 lakhs. The Bench placed reliance on a Departmental clarification published at page 54 of 1986 (26) E.L.T. A similar view was taken by a Single Member of the South Regional Bench in Purushotham Goculdas Plywood Co. v. Collector of Central Excise -....
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....d Schedule (read with any relevant notification issued under sub-rule (1) of Rule 8 of the said Rules) [or sub-section (1) of Section 5A of the Central Excises and Salt Act, 1944 (1 of 1944) as is equivalent to an amount calculated at the rate of 10% ad valorem : Provided that the amount of duty of excise payable on the specified goods under sub-clause (i) of clause (a), or, as the case may be, under this clause, shall not be less than an amount calculated at the rate of 5% ad valorem : Provided further that the aggregate value of clearances of the specified goods in terms of clause (a) and clause (b) of this paragraph taken together, shall not exceed rupees seventy five lakhs. 2. The aggregate value of clearances of the specified goods from any factory by one or more manufacturers in any financial year under clauses (a) and (b) of paragraph 1, shall not exceed rupees thirty lakhs and sixty lakhs respectively : Provided that the aggregate value of clearances of the specified goods from any factory by one or more manufacturers in any financial year in terms of clause (a) and clause (b) of paragraph 1 taken together, shall not exceed rupees seventy five lakhs. 3. ....
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....ing contained in this paragraph shall apply in respect of the inputs which are received in any factory after the 31st day of March, 1989. 6. Nothing contained in this notification shall apply to the clearances of specified goods for home consumption during the period beginning with the 25th day of March, 1986 and ending with the 31st day of March, 1986 (both days inclusive). 7. The exemption contained in this notification shall not apply to the specified goods where a manufacturer affixes the specified goods with a brand name or trade name (registered or not) of another person who is not eligible for the grant of exemption under this notification : Provided that nothing contained in this paragraph shall be applicable to the specified goods which are component parts of any machinery or equipment or appliances and cleared from a factory for use as original equipment in the manufacture of the said machinery or equipment or appliances and the procedure set out in Chapter X of the said Rules is followed : Provided further that nothing contained in this paragraph shall be applicable to the specific goods where a manufacturer affixes the specified goods with a brand ....
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.... one or more manufacturers in any financial year subject to limit of Rs. 75 lakhs for the aggregate value of clearances from any factory by one or more manufacturers in any financial year. (8) The eligibility criterion is that the aggregate value of clearances of excisable goods for home consumption in the previous financial year should not have exceeded Rs. 150 lakh. The applicability clause is clause 4 of the Notification. 7. Tne Departmental clarification referred to in EL. P. EM. Industries case referred in 1989 (43) E.L.T. 599 (T) was issued by the Hyderabad Collectorate. The following answer was given to question No. 4.1 as to what was the concession available to a small scale unit and what is the limit upto which excise duty is fully exempted under the notification? "A small scale unit is allowed complete exemption from excise duty on the first clearances made in any financial year upto a value of Rs. 15 lakhs for goods classifiable under any one heading of the Central Excise Tariff. If a manufacturer manufactured excisable goods falling under more than one tariff heading he will be allowed to avail of full exemption upto Rs. 30 lakhs, subject to the condi....
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....t. Value of clearances made upto end of June of the finan-cial year on avail-ing exemption. Value of clearances upto end of June of the financial year  by paying duty. Value of clearances in July of the financial year. (1) (2) (3) (4) Product A Rs. 15 lakhs  Rs. 5 lakhs    - Product B Rs. 10 lakhs  - Rs. 5 lakhs   According to the assessee, for the purpose of calculating the limit of Rs. 30 lakhs, value of first clearances of product 'A' shall be taken to be only Rs. 15 lakhs, ignoring the value of clearances of product `A' on payment of duty (Rs. 5 lakhs) in which case the assessee would be entitled to clear product 'B' upto a limit of Rs. 15 lakhs and since clearances were made only upto Rs. 10 lakhs, assessee would be entitled to clear product 'B.' of the value of Rs. 5 lakhs in July of the year without payment of duty. In other words, in reckoning the first clearances, one is not required to proceed chronologically and can ignore the clearances of product `A' made on payment of duty beyond the limit of Rs. 15 lakhs. The contention of the Revenue is that in reckoning first clearances one has ....
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....ioner that he could simultaneously clear the goods on full rate of duty would militate against the plain language of the Notification. It would convert an exemption granted to first clearances in the chronological order into a concession granted on the aggregate sale during the entire financial year to be taken on such clearances as the manufacturer deems fit. This was not the intention of the Government in issuing the Notification". (Emphasis supplied) 12. It was brought to the notice of the Madhya Pradesh High Court that the view taken by the Indore Collectorate was contrary to the view taken by certain other Collectorates on the interpretation of the notification and the Court held that that circumstance cannot deter a Court from interpreting the provisions of the notification in a correct manner. 13. The exemption under notification is for specified goods cleared for home consumption on or after the first day of April in a financial year. The limit of Rs. 30 lakhs is placed on the aggregate value of first clearances on specified goods. Within the first clearances on specified goods upto Rs. 30 lakhs the aggregate value of exemption is available only upto Rs. 15 ....