Full Judgment
2. The facts giving rise to this appeal may briefly be stated as under : 3. The appellants are engaged in the manufacture of motor vehicle parts falling under sub-heading 8714.00 of the CETA. They were not entitled to the benefit of Notification No. 175/86-C.E., dated 1-3-1986, as when they applied for the Central Excise L-4 licence they declared their firm as partnership concern, whereas SSI certificate was taken in the name of sole proprietorship concern and as such the certificate was not valid for the partnership firm and they were liable to pay the duty.
They were served with the show cause notice dated 4-4-1991 on the basis of their monthly R.T.12s of February, 1991 and duty demand of Rs. 22,008.68 was raised from them. They contested the correctness of the notice on the ground that their SSI certificate was perfectly valid and they were entitled to the benefit of Notification No. 175/86-C.E. But the Assistant Collector did not agree with their contention and confirmed the demand through the order in original dated 7-4-1994. They challenged this order of the Assistant Collector before the Collector (Appeals), but the same was confirmed and their appeal was dismissed through the impugned order in appeal dated 2-9-1994.
4. Being dissatisfied with the impugned order in appeal the appellants have come up in appeal before the Tribunal.
6. The learned counsel for the appellants has assailed the validity of the impugned order on the ground that the benefit of Notification No.175/86-CE dated 1-3-86 could not be legally denied to the appellants on the simple ground that initially their firm was a sole proprietorship concern when SSI certificate was taken and later on it was converted into partnership, as the registration as SSI unit continued in the name of the firm M/s. Shiv Engineering Industries irrespective of change in its constitution. Therefore, the impugned order of the Collector (Appeals) is illegal and deserves to be set aside.
7. On the other hand, the learned JDR while refuting the contention of the learned counsel, has contended that after the change in the constitution of the firm, the appellants were required to get fresh SSI certificate in order to claim the benefit of the Notification No.175/86-C.E., dated 1-3-1986.
8. The facts are not much in dispute. Initially the firm of the appellants was a sole proprietorship concern. The SSI certificate was issued in the name of firm M/s. Shiv Engineering Industries on 14-9-1990 as is clear from the copy of the certificate placed on the record. No doubt, later on the constitution of the firm was changed and the firm became partnership concern by the joining of another partner in November 1990 but this change was also intimated to the Directorate of Industries. The name of the firm even after its conversion from sole proprietorship to partnership concern, remained the same i.e. M/s. Shiv Engineering Industries. Even the office of the Directorate of Industries also issued certificate dated 29-4-1991 on the request of the appellants that the registration of the firm was valid before and after the change in the constitution of the firm.
9. By mere change in the constitution of the firm, its registration as SSI unit was not effected in any manner. The name of the firm which was got registered as SSI unit with the Directorate of Industries was never changed and remained the same even after it became a partnership concern in November 1990. Therefore, its registration as SSI unit was rightly certified to be valid before as well as after change in its constitution, by the Directorate of Industries. That being so, the view taken up by the Collector (Appeals) to the contrary that after the change in the constitution of the firm, the appellants were required to get new certificate as SSI unit must be held to be erroneous and devoid of law. No such condition that after the change in the constitution of the firm/factory, fresh certificate as SSI unit would be obtained by the assessee finds mention in the Notification No. 175/86-C.E., dated 1-3-1986 for claiming its benefit. Therefore, the benefit of this notification for the disputed period could not be legally denied to the appellants on the ground that there was change in the constitution of the firm.Kedia Organic Chemicals Pvt. Ltd. v. CCE, 1996 (83) E.L.T. 438 where change in the name of the company was effected on 23-10-1989, while modification was done on 21-7-1990 in the certificate issued by the Directorate of Industries, it was observed "that SSI benefit could not be denied for the intervening period from 23-10-1989 to 20-7-1990, of Notification No. 175/86-C.E. as no change in the status/management of the company, except the name took place".
Following the ratio of the law laid down in this case and keeping in view the facts and circumstances of the case in hand, referred to above, it must be held that the authorities below have wrongly denied the benefit of the Notification No. 175/86-CE dated 1-3-86, to the appellants for the intervening period in question. Their registration as SSI unit got made vide certificate dated 14-9-1990 in the name of the firm M/s. Shiv Engineering Industries, continued to be valid even after the change in its constitution which was notified by the Directorate of Industries on 8-3-1991 in the record. The certificate dated 29-4-1991 issued by the Directorate of Industries regarding the validity of their registration as SSI unit, had been wrongly ignored by the authorities below.
11. The appellants being entitled to the benefit of Notification No.175/86-CE dated 1-3-1986 for the period in question the duty demand raised from them must be held to be illegal and unsustainable in the eyes of law.
12. Consequently, the appeal of the appellants is accepted and the impugned order of the Collector (Appeals) is set aside with consequential relief to the appellants, if any, permissible under the law.