TaxTMI 
TaxTMI 
2017 (11) TMI 1037
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....exemption is subject to certain conditions, which includes exercising option in writing to the jurisdictional Assistant Commissioner/ Deputy Commissioner with copy to the Superintendent of Central Excise giving certain details. The appellant has not produced any evidence regarding filing of such option. Therefore, it was alleged that appellant is not eligible to avail benefit of said notification as they have not complied with the conditions. In that circumstances, show cause notice was issued to demand differential duty along with interest and to impose penalty on the appellant. The matter was adjudicated, duty was demanded along with interest and penalty was imposed. On appeal before the ld. Commissioner (Appeals), ld. Commissioner (Appeals) confirmed the demands. Aggrieved from the said order, the appellant is before us. 3. The ld. Counsel for the appellant submits that mere non-filing of declarations by the appellant cannot be fatal for the appellant to deny exemption under the notification in question. It is his submission that the appellant has been filing ER-3 returns regularly and it has been shown that they are availing the benefit of notification by paying duty on conc....
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....n notification is applicable to the case of the assessee, the same should be construed liberally. 12. A notification like any other provision of a statute must be construed having regard to the purpose and object it seeks to achieve. For the aforementioned purpose, the statutory scheme in terms whereof such a notification has been issued should also be taken into consideration. 20. We, as noticed hereinbefore, have no quarrel with the proposition that exemption notification should be construed strictly which means that benefit thereof should not be granted to one, who is not entitled therefore. But it is also true that those who are entitled to the benefit cannot be deprived therefrom by taking recourse to the doctrine of narrow interpretation simplicitor, although the purpose and object thereof would be defeated thereby. In Kartar Rolling Mills v. Commissioner of Central Excise. New Delhi [2006 (197) E.L.T. 151 = (2006) 4 SCC 772], this Court held : It is trite to say that exemption notification has to be construed strictly. Since the notification came into effect from 11-4-1994, the benefit of the notification cannot be extended to the appellan....
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....rice bran fatty acid derived from rice bran oil. The whole purpose and object of the notification is to encourage the utilisation of rice bran oil in the process of manufacture of soap in preference to various other kinds of oil (mainly edible oils) used in such manufacture and this should not be defeated by an unduly narrow interpretation of the language of the notification even when it is clear that rice bran oil can be used for manufacture of soap only after its conversion into fatty acid or hydrogenated oil. From the above, it can be seen that the Hon'ble Apex Court has held that the assessee cannot be deprived of the benefits by taking recourse to the doctrine of narrow interpretation simplicitor, thereby the purpose and object thereof would be defeated. We further find that in the similar facts, in the case of Kanodia Polychem (P) Limited (supra), this Tribunal has held as under:- 4. Having considered the rival contentions and in view of the uncontroverted fact that the appellant have availed exemption on the clearance of the un-branded goods and have paid full rate of duty on clearance of branded goods, we hold that the appellant have not violated the provi....
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....ced; (e) date from which option under this notification has been exercised; (f) aggregate value of clearances of specified goods (excluding the value of clearances referred to in para 3 of this notification ) till the date of exercising the option; 10. In this context, it would be pertinent to refer to the case of CCE, New Delhi Vs. Hari Chand Shri Gopal and others 2010 (260) ELT 3 (SC), wherein the Constitution Bench of the Hon'ble Supreme Court considered the matter of exemption under Notification No. 121/94-CE and also the pre-conditions for entitlement to avail such exemption. While deciding the said matter, Hon'ble Apex Court held that the Tribunal has committed an error in overlooking the object and purpose of the procedure laid down in Chapter X. It was also held that detailed procedures have been laid down in Chapter X so as to curb the diversion and misutilisation of goods which are excisable. Hon'ble Supreme Court while dealing with the scope and ambit of Chapter X and while laying down the aforesaid conclusions also laid down certain guidelines. In the said case, the court has clearly held that the aforesaid approach of the Tribunal was wrong and....
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....their option to avail exemption under this notification, i.e., to pay duty at 60% of the normal rate of duty at the beginning of the financial year itself and the option once exercised, cannot be changed in the same financial year. Needless to emphasize that the condition to exercise the option is the basis for availing the benefit of the exemption notification, and therefore, ought to be complied with so as to be eligible for the benefit of the said notification. The condition 2 is mandatory one is further clear from a reading of sub-clause (iii) along with the illustrations enumerated thereunder. Therefore, the said condition 2 cannot be designated as a mere procedural one and to avail the benefit of the notification need not be fulfilled. Recently, the Hon'ble Supreme Court, in the case of Honda Siel Power Products Ltd. s case (supra), while considering the eligibility to the Notification No. 10/2002-C.E., dated 1-3-2002, observed as follows :- 4. We find that the Tribunal has decided the case in favour of the assessee by observing that clearing of goods with payment of Excise duty with current account was only an error and the assessee had not violated the more substan....
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....urpose and intent of the mandatory and substantive requirements of clause 2(i) and 2(ii) of the notification. 14. Following the above judgments of Hon'ble Supreme Court in the case of CCE, New Delhi Vs. Hari Chand Shri Gopal and others (Supra) and the Tribunal judgment in the case of Surat Metallics Pvt. Ltd. Vs. CCE & ST, Surat (supra), I find that there is no merit in the appeal filed by the appellant and accordingly the same is dismissed. DIFFERENCE OF OPINION As there are divergent views of the Members, therefore, the matter is referred to the Hon'ble President to appoint third Member to resolve the following points of difference of opinion:- Whether the Member (Judicial) is correct in relying on the decisions in the case of Malwa Industries Limited (supra) and Kanodia Polychem (P) Limited (supra) to hold that appellant is entitled for the benefit of SSI exemption Notification No. 9/2003-CE dated 01.03.2003 or the Member (Technical) is correct in holding that the appellant is not entitled to avail the benefit of Notification No. 9/2003-CE dated 01.03.2003 relying on the decision in the case of Hari Chand Shri Gopal and others (supra) and Surat Mettalics Pvt. Lim....
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....th a copy to the Superintendent of Central Excise giving the following particulars, namely :- (a) name and address of the manufacturer; (b) location/locations of factory/factories; (c) description of inputs used in manufacture of specified goods; (d) description of specified goods produced; (e) date from which option under this notification has been exercised; (f) aggregate value of clearances of specified goods (excluding the value of clearances referred to in para 3 of this notification) till the date of exercising the option; (iii) ----------------------------------------------------------------------- (iv) ----------------------------------------------------------------------- (v) ----------------------------------------------------------------------- (vi) ----------------------------------------------------------------------- 17. As the appellant had admittedly not filed the said option in writing, Learned Member (Technical) held that the benefit would not be available to them whereas Learned Member (Judicial) observed that the said filing of option is a procedural requirement and non ....
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....e Learned Member (Judicial) observed that once it is found that notification is applicable to the assessee, the same has to be construed liberally having regard to the purposes and objects it seeks to achieve. Admittedly, in the present case, the purpose of small scale notification is to grant benefit to the SSI and to encourage the small scale industries. Such purpose cannot be defeated on the ground that option was not made separately on a piece of paper but the same was conveyed to the Revenue in the form of ER-3 returns. 21. Reliance by learned Member (Technical) in the case of Hari Chan Shri Gopal-2010 (260) ELT 3 (SC) is not directly on the issue, inasmuch as the disputed issue before the Hon bel Supreme Court was non following the procedure laid down in the terms of Chapter X. It may be observed here that the said Chapter X lays down a procedure for movement of inputs/raw material/goods to the factory of another manufacturer, without payment of duty, in which case the exemption is available to the said goods, if they are further used by the recipient. An elaborate procedure is required to establish, beyond doubt, that the goods manufactured and cleared by an assessee stan....
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....t be construed as mandatory, the procedural law is always subservient to and is in aid to justice. Any interpretation which eludes or frustrates the recipient of justice is not to be followed. All the rules of procedure are the handmaids of justice. The language employed by the draftsman of procedural law, may be liberal or stringent, but the fact remains that the object of prescribing procedure is to advance the cause of justice. Similarly, in the case of Mangalore Chemicals & Fertilizers Ltd.-1991 (55) ELT 437 (SC) it was held that distinction has to be made between procedural condition of a technical nature and a substantive condition and non observance of the former is condonable while that of the latter may not be. 24. If we examine the condition of filing declaration in view of above observations and declarations of law by the Supreme Court, it has to be held that the benefit of notification in question is based upon the fulfilment of other conditions, like assessee being a small scale manufacture, the quantum of clearances effected in a particular year and the use of brand name etc. Filing of declaration has to be held as procedural conditions. Some conditions are substan....