TaxTMI 
TaxTMI 
2021 (10) TMI 891
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.... (3) Whether on the facts and in the circumstances of the case, the CESTAT was right in holding that whatever interpretation was put on Notification No. 1/93 would affect the availment of the benefit of the deemed credit order No.TS/36/94TRU dated 1.3.1994 ?" 2. The order challenged by the appellant- assessee in the present tax appeal passed by CESTAT is rather brief and reads as under: "Both sides duly represented by Shri A.D.Maru, leamed advocate appearing for the appellants and Smt. A. Vasudev, Jt. CDR appearing for the Revenue, fairly agree that the disputed issue as to whether the reroller, whose aggregate value of clearances in a financial year have exceeded 75 lakhs, are eligible or not for the benefit of deemed credit, stands decided by Larger Bench decision of the Tribunal in case of M/s. Digambar Foundary vs. Collector reported in 2000 (118) ELT 85 (Tribunal) which stands subsequently followed by the Tribunal in case of M/s. Vinubhai Steel Co.(P) Ltd., reported in 2003 (161) ELT 326 (Tribunal Mumbai). As such, by following the ratio of above decision, we reject the appeals," 3. It can thus be seen that the Tribunal dismissed the appeal of the assess....
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....sfied. Such criteria related to the aggregate value of clearances made in the past year. Under Notification No.1/93, the benefit thereunder has been provided till clearances reached 75,00,000/- and thereafter, the normal rate of duty was payable by such manufacturers. The Government of India Order dated 1st March 1994 granting facility of deemed credit, was available to re-rollers availing of the exemption under Notification No.1/93. It appears that the Government, taking into consideration the ground realities in regard to purchase of material by the re-rollers from the open market, by virtue of such order, has exempted them from the requirements of production of gate pass etc. evidencing payment of duty in respect of ingots and re-rollable materials of iron and steel purchased from outside and lying in stock on or after the 1st day of April 1994. The moot question that arises for consideration is whether the deemed credit provided to the rerollers under the order dated 1st March 1994 is available to them even if their clearances exceed Rs. 75,00,000/-. 15. On behalf of the revenue it has been contended that while providing the benefit of deemed credit under the Governmen....
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.... payment of duty. 17. On a plain reading of the second proviso to rule 57G (2) of the rules, it is clear that what the same envisages is that having regard to the circumstances described therein, the Central Government may direct that with effect from a specified date all stocks of inputs (as described therein) as are clearly recognizable as being nonduty paid, may be deemed to be duty paid. Thus, the proviso contemplates issuance of an order in respect of goods that are clearly recognizable as being non-duty paid which shall be deemed to be duty paid and credit of duty in respect of such inputs may be allowed at such rate and subject to such conditions as the Central Government may direct, without production of documents evidencing payment of duty. The contention that the Central Government would have presumed the goods to be duty paid, therefore, flies in the face of the second proviso to rule 57G(2) of the rules and therefore, does not merit acceptance. 18. With a view to properly appreciate the controversy involved in the present case, it may be germane to refer to the Central Government order dated 1st March, 1994 which came to be issued vide Notification:TS/....
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....clause (1) thereof. The second proviso to clause (1) of the notification postulates that the aggregate value of clearances of the specified goods in terms of sub-clauses (a), (b) and (c) taken together, shall not exceed rupees seventy five lakhs. Clause (3) of the notification provides that nothing contained in the notification shall apply if the aggregate value of clearances of all excisable goods for home consumption,- (a) by a manufacturer, from one or more factories, or (b) from any factory, by one or more manufacturers, had exceeded rupees two hundred lakhs in the preceding financial year. 21. Thus, from the heading of the notification it is clear that the benefit thereunder is available to S.S.I. units provided they have not exceeded clearances of rupees two crores in the preceding financial year. What is stated in the heading is provided under clause (3) of the notification which limits the entitlement to the benefit of the notification to S.S.I. units, the aggregate value of whose clearances have not exceeded rupees two hundred lakhs. In effect and substance, clause (3) of the notification provides for the eligibility criteria for getting the benefit of the said no....
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....concerns availing of exemption under Notification No.1/93- C.E., dated 28-2-1993 will be deemed to have paid duty under Rule 57-I of the Rules and the credit may be allowed to them at the rate fixed without production of any documents evidencing the payment of duty. Any manufacturer whose total clearances did not exceed Rs. 2 crores was entitled to the benefit of exemption under the Notification No.1/93-C.E. No doubt the benefits under this notification were limited to clearances of Rs. 75 lacs but this does not mean that manufacturers whose clearances exceeded Rs. 75 lacs were not availing the exemption under the notification. In our considered view, the only interpretation which can be given is that the wording used in the notification identifies the category of manufacturers who are satisfying the criteria as set out in Notification No.1/93-C.E. and are availing of the benefit of the said notification. The trade note limiting this benefit to those manufacturers whose clearances do not exceed Rs. 75 lacs is totally illegal and against the deemed credit order issued by the Ministry. We may also point out that though the department may be bound by its trade note, the industry is no....
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....hat the Appellant satisfied the conditions - Notification No.1/93- C.E., dated 28-2-1993 and Ministry's Deemed Credit Order TS/36/94-TRU, dated 1-3-1994 and applying the ratio laid down by the Division Bench of Himachal Pradesh High Court in 2009 (241) E.L.T. 186 (H.P.) [Sood Steel Industrial (P) Limited v. Commissioner of Central Excise], we are of the view that the order of Tribunal cannot be sustained." 25. The Karnataka High Court in Pashupati Steels v. Commissioner of Central Excise, Bangalore (supra) has also taken a similar view. 26. In the light of the above discussion, question No.2 in Tax Appeals No.56/2005 to 74/2005 is answered in the negative, that is, in favour of the assessee and against the revenue. The Tribunal was not justified in holding that the benefit of deemed credit available under Order TS/36/94-- TRU dated 1st March, 1994 passed by the Central Government in exercise of powers conferred under rule 57G(2) of the erstwhile Central Excise Rules, 1994 could be denied to the re-rollers whose value of clearances have crossed Rs. 75,00,000/- in a particular financial year for the purposes of exemption Notification No.1/93 on the ground that such ....