CCE Vs. JANARDAN PLYWOOD INDUSTRIES LTD.

JUDGEMENT

(1.) Heard the learned DR for the appellants and learned advocate for the respondent. The appellants challenge the order dated 6 of August 2004 passed by Commissioner (Appeals), Meerut, whereby the appeal filed by the respondents was allowed and thereby the order passed by the Adjudicating Authority was set aside. The Adjudicating Authority namely Additional Commissioner, Meerut by its order dated 28 March 2004 had confirmed the demand of duty to the tune of Rs. 6,25,000/ - under Rule 9(2) of the Central Excise Rules 1944 being the amount short paid in contravention of the provision of Notification No. 1/93 -CE dated 28 February 1993 for the period from April 1996 to July 1996 and which was demanded under show cause notice dated 30 of October 1996.

(2.) The respondents were engaged in manufacture of wood and articles of woods, falling under Chapter 44 of the schedule to the Central Excise Tariff Act, 1985. Pursuant to the order passed by the Hon'ble Allahabad High Court in writ -petition No. 27 of 1995 regarding amalgamation of M/s Dinex Plywood (P) Ltd., Sitapur with the respondent company, a declaration came to be filed on 1st April 1996 by the respondents opting to pay full rate of excise duty in relation to the unit at Sitapur while at the same time opting to avail exemption benefit under Notification No. 1/93 -CE dated 28 February 1993 as amended in relation to the unit at Dehradun. Referring to the amendment to the said notification and alleging illegal availment of exemption benefit under the said notification in relation to only one unit and resultant contravention of the provision of Rule 9(1), 173F & 173G of the Central Excise Rules, 1944, a show cause notice dated 30 October 1996 came to be issued to the respondents. The same was contested by the respondents, however, the Adjudicating Authority rejected the contentions sought to be raised on behalf of the respondents and confirmed the demand of Rs. 6,25,000/ - as stated above.

(3.) While assailing the impugned order, the learned DR submitted that as per the Notification No. 1/93 -CE dated 28th February 1993 a manufacturer has an option to avail the exemption under the said notification in view of the amendment to the said notification vide notification No. 59/94 -CE dated 1st March 1994, but once he has made the option, he cannot make any changes therein in the same financial year. It is the contention on behalf of the appellants that pursuant to the amalgamation of M/s Dinex Plywood (P) Ltd., Sitapur with the respondent company, both the units came under same manufacturer and, therefore, the manufacturer of both these units, having opted to pay the duty at full rate in respect of their unit at Sitapur, the same option will have to be continued in relation to the unit at Dehradun also, as the benefit under the notification cannot be confined to only one unit of one manufacturer. Attention was also drawn to the decision of the Tribunal in the matter of Buildmat (P) Ltd. v. CCE, Bangalore reported in : 2001 (137) E.L.T. 906 (Tri. - Bang.). It was further contended that the Clause (ii) & (iii) of the Notification No. 1/93 -CE clearly speaks of a manufacturer of one or more factories in relation to the aggregate value of all the production of the specified goods which are required to be considered for the purpose of ascertaining compliance of the maximum limit of production for availing the benefit under the said notification. This according to the learned DR would disclose that the exemption benefit under the said notification which can be claimed by manufacturer and if a manufacturer has more than one factory, the option in relation to one factory cannot be different from the one in relation to another factory or factories. Further drawing our attention to the amendment, under paragraph 4, it was sought to be contended that the option cannot be distinct and separate in respect of each of the units of the one manufacturer.