Full Judgment
2. The notice issued to the applicant proposed recovery of duty consequent upon the denial of the exemption contained in notification 175/86 that it had claimed. The basis for the denial was on the ground that the certification of the registration of the appellant as a small scale industry was only provisional and not final and the investment made in the plant and machinery of Rs. 35 lakhs was in excess of the limit prescribed for a small scale industry. The notice dated 14.2.95 sought to recover duty paid allegedly not paid during 1989-90 and 1990-91 and hence invoked the extended period of limitation contained in proviso below Section 11A(1) on the ground that the appellant had allegedly wilful mis-statement by the appellant. The Commissioner has confirmed the proposal in the duty and imposed penalty.
3. It has to be accepted that a mere provisional certificate is not conclusive evidence of the fact that the appellant was a small scale industry. A provisional certificate is just that a temporary recognition of the appellant states and unless it is confirmed by issue of a final or a regular certificate would not be sufficient authority for recognising the appellant as a small scale unit. It is perfectly possible for a provisional certificate to be cancelled. The provisional certificate is no ground for claiming the benefit of the exemption.
However, the appeal would have to be allowed on the ground that the extended period of limitation would not be available to the department.
In the two classification lists that the appellant had filed for the two years in question have been approved by the Asst. Collector no doubt after considering the certificate dated 16.10.90 issued by District Industries Centre to the appellant permitted it to avail of the exemption. The department was informed that the appellant had not been granted the status of small scale industry. The extended period of limitation would not be available in this regard.
4. The other contention that the value of investment in the plant and machinery of the appellant they exceeded the limit prescribed by the authorities competent to grant the recognition of the small scale industry also is not acceptable. Notification 175/86 does not certain anywhere in it any department about the maximum level of plant and machinery. This is the requirement only of the state government authority for granting the recognition to an unit as a small scale industry. Whether the state government authorities were misled by the appellant or whether as the counsel for the appellant contends, it is not a matter that should concern the Collector. He was only required to go into the notification.