Commissioner of C. Ex. Vs. Sri Krishna Steels - Court Judgment

Excerpt:
1. this reference application arises out of the order of the tribunal bearing no. 801/96. the following point of law has been urged for reference : "whether the hon'ble cegat is correct in extending the deemed credit benefit to an unit availing of the exemption in terms of notification no. 1 /93-c.e., dated 28-2-1993 even after crossing the value of clearances of rs. 75 lakhs when the unit pays full rate of duty?".2. the learned sdr has pleaded that the benefit of deemed modvat in terms of the notification in question would be available only up to the point the assessees clear the goods at exempted rates with the slab basis under the notification 1 /93. he has pleaded the limit with slab exemption is exceeded the ssi units have for excise purposes to function like any other unit and therefore the benefit in question in terms of the notification would not be available.3. the learned consultant for the respondents adopted the reasonings of the tribunal and has pleaded that the concession was made available to obviate any difficulty in the matter of taking any modvat by ssi units who have necessarily to buy the goods from the market as they are not in a position to buy the goods in bulk from the original manufacturers who generally choose to sell goods through reputed dealers who purchase the requirements in bulk.4. we have considered the pleas made by both the sides. we observe that the tribunal has given detailed reasonings in the order for holding that the deemed modvat facility would be available in respect of the ssi units even when they cross the slab exemption limit so long as the total clearances fall within the overall eligibility parameters provided for in the notification. the benefit has been made available to ssi units taking into consideration the peculiar conditions under which they operated and taking note of the difficulties. once the ssi unit is identified to be eligible for notification 1/93, all the benefits which are available for the purpose whether for modvat purposes or otherwise would continue to be available to them so long as the status for the purpose of notification for ssi is not disturbed. in that view of the matter we hold that the question as framed does not merit reference. the reference application is accordingly dismissed.

Judgment:
1. This reference application arises out of the order of the Tribunal bearing No. 801/96. The following point of law has been urged for reference : "Whether the Hon'ble CEGAT is correct in extending the deemed credit benefit to an unit availing of the exemption in terms of Notification No. 1 /93-C.E., dated 28-2-1993 even after crossing the value of clearances of Rs. 75 lakhs when the unit pays full rate of duty?".

2. The learned SDR has pleaded that the benefit of deemed Modvat in terms of the Notification in question would be available only up to the point the assessees clear the goods at exempted rates with the slab basis under the Notification 1 /93. He has pleaded the limit with slab exemption is exceeded the SSI units have for excise purposes to function like any other unit and therefore the benefit in question in terms of the Notification would not be available.

3. The learned Consultant for the respondents adopted the reasonings of the Tribunal and has pleaded that the concession was made available to obviate any difficulty in the matter of taking any Modvat by SSI units who have necessarily to buy the goods from the market as they are not in a position to buy the goods in bulk from the original manufacturers who generally choose to sell goods through reputed dealers who purchase the requirements in bulk.

4. We have considered the pleas made by both the sides. We observe that the Tribunal has given detailed reasonings in the order for holding that the deemed Modvat facility would be available in respect of the SSI units even when they cross the slab exemption limit so long as the total clearances fall within the overall eligibility parameters provided for in the Notification. The benefit has been made available to SSI units taking into consideration the peculiar conditions under which they operated and taking note of the difficulties. Once the SSI unit is identified to be eligible for Notification 1/93, all the benefits which are available for the purpose whether for Modvat purposes or otherwise would continue to be available to them so long as the status for the purpose of Notification for SSI is not disturbed. In that view of the matter we hold that the question as framed does not merit reference. The reference application is accordingly dismissed.