IMPORTANT POINT
The benefit of exemption under the notification in question should be extended to the respondent with effect from the date on which the application for grant of registration was made by it before the competent authority.

Headnote:(i) Central Excise Rules, 1944-Rule 8(1)-Notification dated March 1, 1986-Date from which the respondent is entitled to the benefit of exemption contained in said notification dated March 1, 1996-Whether from date of registration or from date of application for registration? (the later)-Two applications moved for registration-From which date-Matter remanded to Tribunal to decide-Appeal disposed of accordingly.
       Held : We therefore, agree with the majority view of the Tribunal and hold that the benefit of exemption under the notification in question should be extended to the respondent with effect from the date on which the application for grant of registration was made by it before the competent authority. This is also in accord with the principle which found favour with this Court in State of U.P. & Anr. vs. Haji Ismail Noor Mohammad & Co. and The Assessing Authority & Ors. vs. Patiala Biscuits Manufacturers Pvt. Ltd. (supra) (Para 10)
       Held further (on second aspect) : We therefore remit the matter to the Tribunal to hear the parties and record a clear finding as to whether the first application made on 3rd December, 1986 was an application for registration whether provisional or permanent, and whether the second application made sometime in February/March, 1988 was an application which was supplemental in nature or in continuation of the first application made on 3rd December, 1986. If the Tribunal comes to the conclusion that the application made on the 3rd of December, 1988 rejected, then the benefit of exemption should be extended to the respondent only with effect from the date of the second application made sometime in February, 1988, However if the Tribunal comes to the finding that the first application made on 3rd December, 1986 remained pending and the second application made sometime in February/March, 1988 was merely a continuation of the first application, being supplemental in nature then the respondent would be entitled to the benefit of exemption with effect from the date of the first application i.e. from 3rd December, 1986. The Tribunal will dispose of the appeal accordingly. The bank guarantee furnished by the respondent pursuant to the judgment and order dated 7th February, 2000 shall be kept alive till the matter is decided by the Tribunal. This appeal stands disposed of in the above terms. No order as to costs. (Paras 11, 12 and 13)

JUDGMENT

B.P. Singh, J.-The short question which arises for consideration in this appeal is as to the date from which the respondent is entitled to the benefit of exemption contained in the notification dated March 1, 1986, issued by the Govt. of India in exercise of powers conferred by sub rule 1 of Rule 8 of the Central Excise Rules, 1944. While the appellant contends that the benefit of exemption can be availed only with effect from the date on which the certificate of registration is issued by the Director of Industries in any State, the respondent contends that the benefit of such exemption must be extended from the date of the application for registration and the respondent should not be deprived of the benefit of such exemption merely because on account of administrative delays the certificate of registration is issued much later.

2. Briefly stated the facts of the case are that the respondent is engaged in the business of manufacturing cooling towers. It commenced production with effect from June, 1986. On December 3, 1986 it applied to the Director of Industries, West Bengal, for grant of registration. There is some dispute as to whether this application was for grant of registration or for the grant of provisional registration, a question on which we wish to express no opinion. It appears that the said application was not disposed of and therefore sometime after February, 1988 as contended by the appellant, the respondent applied afresh for permanent registration which was granted by order dated March 31, 1988. The question, which arises for consideration, is whether the respondent is entitled to the benefit of exemption under the aforesaid notification with effect from the date of application or with effect from March 31, 1988, the date on which registration was granted.

The Collector by his order dated January 31, 1989 took the view that benefit of the exemption can be granted only with effect from the date on which the registration certificate was issued. He observed that the respondent had applied for provisional registration on 3.12.1986 which was not granted to it. Later a permanent registration certificate as a small scale industrial unit was issued to it on 31.3.1988 in response to another application made for grant of permanent registration. Thus the Respondent was given permanent registration pursuant to a fresh application made subsequently, and not pursuant of its earlier application submitted on 3.12.1986 for provisional registration.

3. In the appeal before the Customs, Excise and (Gold) Appellate Tribunal, Eastern Bench, Calcutta, the Members of the Tribunal took differing views. While the judicial member held that the respondent was entitled to the benefit of exemption with effect from the date of application, the technical member took the view that the benefit of exemption could be extended only with effect from the date of registration. The matter was therefore referred to a third member who agreed with the judicial member and held that the respondent was entitled to the benefit of exemption under the notification in question with effect from the date of application.

4. The Learned Addl. Solicitor General appearing for the appellant commended for our acceptance, the view of the technical member and laid emphasis on the language of the notification particularly paragraph 4 thereof which reads as under:

"The exemption contained in this notification shall be applicable only to a factory which is an undertaking registered with the Director of Industries in any State or the Developmental Commissioner (Small Scale Industries) as a small scale industry under the provisions of the Industries (Development and Regulations) Act, 1951 (65 of 1951)."

5. On the other hand, Dr. Debi Pal, learned Sr. counsel appearing on behalf of the Respondent contends that paragraph 4 does not prescribe the date with effect from which the certificate becomes effective. He submitted that the certificate issued by the

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2003 Supreme(SC) 312

IMPORTANT POINTThe benefit of exemption under the notification in question should be extended to the respondent with effect from the date on which the application for grant of registration was made by it before the competent authority.

Cases Referred (1)

IMPORTANT POINT
The benefit of exemption under the notification in question should be extended to the respondent with effect from the date on which the application for grant of registration was made by it before the competent authority.