Per Justice K.K. Usha : The issue placed for consideration by the Larger Bench is whether an assessee can exercise option not to avail exemption contained under Notification No. 8/99, dated 28-2-99 and pay normal rate of duty on some of the specified goods and claim the benefit of the notification in respect of other specified goods cleared by it.

2. The appellant is manufacturing nine different electrical goods. In their classification declaration effective from 1-4-99 they opted for the benefit of Notification No. 8/99 in respect of four different goods and in relation to remaining five goods they preferred to pay duty at Tariff rate and aviated Modvat credit of duty paid on inputs used in or in relation to the manufacture of said five items. The Commissioner (Appeals) took the view that the appellant being SSI unit had to opt Notification No.8/99 for exemption under value based clearance of all their final products as per Para (i) of the notification or pay normal rate of duty on all goods cleared by them as per Para (ii) and avail of Modvat in respect of all inputs used in or in relation to manufacture of all final products. The appellant could also have exercised option as per Para (1) of Notification No. 9/99-CE, dated 28-2-1999 to avail Modvat credit and clear the goods at a concessional rate of duty at 60% or 80%. According to the Commissioner (Appeals) neither Notification No. 8/99-CE or 9/99-CE, dated 29-2-99 permitted the assessee to split the items of specified goods produced by it to be cleared under value based clearance exemption limit and some of items of specified goods on payment of normal rate of duty with Modvat credit benefit. Aggrieved by the above, assessee filed the present appeal.

3. When the matter came up for hearing before a Bench of Two Members the assessee placed reliance on the decision of this Tribunal in Kamrup Industrial Gases Ltd. Vs. CCE Allahabad - 2000 (117) E.L.T. 734 (T) where it has been held that it is open to the assessee to avail exemption in respect of some of the products and not to claim such exemption in respect of its other items. The Bench prima facie felt that it could not agree with the view taken in Kamrup Industrial Gases Ltd. and therefore, the matter was referred for consideration of a Larger Bench. The appeal has thus come up for hearing before the Larger Bench.

4. The relevant portion of Notification 8/99, dated 28-2-1999 reads as follows:-

"In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944) and read with clause 119, clause 121 and clause 134 of the Finance Bill, 1999, which clauses have, by virtue of the declaration made in the said Finance Bill under the Provisional Collection of Taxes Act, 1931 (16 of 1931), the force of law, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts clearances, specified in column (2) of the Table below, (hereinafter referred to as the said Table) for home consumption, of excisable goods of the description specified in the Annexure appended to this notification (hereinafter referred to as the specified goods), from so much of the aggregate of -

(a) the duty of excise specified thereon in the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986); and

(b) the special duty of excise specified thereon in the Second Schedule to the said Central Excise Tariff Act,

as is in excess of the amount calculated at the rate specified in the corresponding entry in column (3) of the said Table.

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2. The exemption contained in this notification shall apply only subject to the following conditions, namely:-

(ii) a manufacturer has the option to not avail the exemption contained in this notification and instead pay the normal rate of duty on the goods cleared by him. Such option shall be exercised befor