V. Rajamanickam, Member (T)
1. The appellants are manufacturers of “LPG Cylinders”. The issue in dispute is the availment of the exemption Notification No. 175/86-C.E., dated 01-03-1986, for their Unit, as the SSI Certificate was issued to them on 12-09-1986, and the Department has denied the exemption earlier to that date.
2. The appellants contend that they were registered with the Department of Industries as a medium scale unit by virtue of the fact that the capital investment on plant and machinery was more than Rs. 20 lakhs. This limit was raised to Rs. 35 lakhs by the Notification issued on 18-3-1985. The appellants applied for a SSI Certificate on 01-03-1986 for availing exemption under Notification No. 175/86 dated 01-03-1986, and the Department of Industries issued the certificate dated 12-09-1986 with an endorsement that the Unit has obtained SSI status from 01-03-1986 by opting to come under SSI from that date by surrendering the DGTD Certificate to the DGTD, New Delhi.
3. The Assistant Collector of Central Excise allowed their claim for refund for an amount of Rs. 6,23,957.26 which was reviewed by the Collector of Central Excise, Guntur, under Section 35-E of the Central Excises Act and the application filed before the Collector of Central Excise (Appeals) was admitted and the appeal was upheld and the Respondents’ (assessee) claim for SSI exemption was held to be inadmissible prior to the issue of the SSI Certificate on 12-09-1986.
4. The plea of the appellants before the Tribunal is that the delay in the issue of the SSI Certificate by the Department of Industries should not disentitle them from the eligibility of the exemption from 01-03-1986 and the registration itself has categorically specified that the SSI status should be effective from 01-03-1986. The review of the Collector only challenged the order of the Assistant Collector in allowing the refund, but no prayer for calling back the refund was made and the demand was hit by limitation.
5. During the course of his arguments, Shri G. Prabhakar Shastri, the Ld. Advocate, stated that they had applied for issue of SSI Certificate on 01-03-1986 on seeing the press note issued by the Ministry of Industry and Company Affairs, enhancing the limit of investment on plant and machinery from Rs. 25 to Rs. 30 lakhs and placed reliance on the decision of the Supreme Court in (1988) 3 Supreme Court Cases 398-State of UP and Another v. Haji Ismail Noor Mohammad and Co. and pleaded that date of application should be the effective date for purpose of eligibility to SSI exemption, that classification list was approved by the Assistant Collector and a refund was also paid in consequence. Further, the application for review under Section 35-E of the Central Excise Act cannot override the provisions of Section 11-A of the Central Excise Act, and the department cannot ask the appellant to pay back the refund already granted by the Assistant Collector.
6. Shri M.S. Arora, Ld. J.D.R. cited the following decisions in respect of the application made under Section 35-E, vis-a-vis, the time limit under Section 11-A :-
(i) 1985 (22) ELT 892 – CCE, Bangalore v. Raman Boards Ltd.;
(ii) 1988 (34) ELT 473 (Cal.) – Mis. I.T.C. Ltd. & Anr. v. UOI;
(iii) 1988 (38) ELT 571 (SC) – Elson Machines Pvt. Ltd. v. CCE.
that Excise authorities not estopped from taking a view different than in the approved Classification List. He argued that Para 4 of the Notification No. 175/86 dated 01-03-1986 makes a substantial provision that the Unit should be registered with the Director of Industries and the registration should take effect from the date of issue.
7. We have considered the submissions made. The appellants have registered themselves as a medium scale unit as early as 1983, as their capital investment was more than Rs. 20 lakhs, on the enhancement of the limit from Rs. 20 lakhs to Rs. 35 lakhs for considering a unit as a small-scale industry the appellants’ factory became entitled to the small-scale exemption. They have applied for a certificate on 01-03-1986 and received the same on 12-9-1986, with an endorsement that the unit has obtained SSI status from 01-03-1986 by opting-to come under SSI from that date, surrendering the DGTD certificate to DGTD, New Delhi. When the authority issuing the certificate has declared that the unit has obtained the SSI status from 1-3-1986, there is no reason why the appellant should be denied the entitlement to the benefit extended to SSI Units and similar view was taken by this Tribunal in the case of Collector of Central Excise, Madurai v. Mis. Maharaja Paper Board (P) Ltd., Maharajapuram, para 7, reported in 1986 (23) ELT 484. In giving such concessions to small-scale industries, the Government was contemplating the concessions that will accrue and so long as the notification does not specifically mention about the dates from which such certificate takes effect, the exemption cannot be denied. Clause 4 of Notification No. 175/86-C.E. makes it a condition that a factory should be registered with the Director of Industries as a small-scale industry and once such a certificate is issued with an emphasis that the unit has obtained the status of a SSI from 01-03-1986, it should be taken as a sufficient fulfilment of the condition to avail the benefit.
8. The appeal in consequence is therefore allowed.
