PURUSHOTHAM GOCULDAS PLYWOOD CO Vs. COLLECTOR OF C EX

JUDGEMENT

(1.) THESE appeals are against the orders of Collector of Central Excise (Appeals), Madras who by the impugned orders upheld the rejection of the appellants' claim by the original adjudicating authority. The brief facts are that the appellants are a Small Scale Unit eligible for the benefit of Notification No. 175/86. They are manufacturing plywood, veneers and flush doors falling under sub-heading 4408, 4404 and 4410 respectively. The appellants availed of the benefit of exemption upto Rs. 15/- lakhs limit in respect of their product plywood and blackboards. They have also started clearing their product on payment of duty. However, later they cleared the other two specified items and they were asked to pay duty in respect of the same which they did under protest. The duty demand was made for the reason that although the appellants did not exceed the 15 lakhs limit available for exemption for the other two items, inasmuch as they had cleared plywood and blockboards aggregating the value of both duty paid and non-duty paid to nearly Rs. 30.00 lakhs, the benefit of exemption was not available. The order of the original authority in this regard is as under :

(2.) Shri Rajeswara Sastry, the learned Consultant has pleaded that the appellants are a registered SSI Unit and fulfil the eligibility criteria for the Notification 175/86. He pleaded that the appellants had been given full benefit of Notification 175/86 in respect of plywood and blackboards.

(3.) THE point that arises for consideration in the appeal is whether in terms of Notification 175/86 the benefit of the notification is available upto 15 lakhs in respect of each specified item subject to the aggregate value of 30 lakhs and whether on this basis the appellants' claim can be considered as not maintainable. It is seen that the lower authorities have interpreted the notification in a manner that a person who plans his clearance and ensures that he first makes the clearance of each of the two specified goods in respect of which he claims the benefit of Notification upto the aggregate value of 15 lakhs he will get the benefit of exemption for each item but the other person who according to his own manufacturing programme, taking into account the demand and supply, clear goods of category of one specified goods upto a limit of 15 lakhs free of duty and further clears the same specified goods on payment of duty, he would not enjoy the exemption upto 15 lakhs for the other item when he starts clearing the same later and his benefit for the other item would get restricted to the difference between the total aggregate value of non-duty paid and duty paid goods of first category and overall exemption limit of 30 lakhs. Such an interpretation clearly discriminates between the two manufactures similarly placed merely for the reason that they have adopted different order of clearance of the goods of two categories manufactured by them according to their selling or production programme. An interpretation which brings in such a difference between manufacturers without any rationale has to be discarded. We hold that subject to the other parameters of the notification being satisfied the benefit of the Notification for exemption upto 15 lakhs limit for each category of goods in the notification is available and the same should not be denied to the appellants as has been done in the present case. We, therefore direct the lower authority to go into the matter de novo and allow the refund claim in respect of goods in question if they satisfy other parameters in the notification notwithstanding the fact that the clearances have exceeded the limit of 15 lakhs in respect of the first category of goods namely plywood and blockboards. Since we have held above that the exemption is available for the first clearance upto 15 lakhs in terms of the Notification for each of the specified items in the schedule to the Notification notwithstanding the fact that first clearance of duty paid and non-duty paid in respect of one specified item have exceeded 15 lakhs so long as other conditions of the Notifications are satisfied. THE appeals are thus allowed in the above terms.