2016 (11) TMI 1278 - AT - Central Excise

Levy of excise duty - activity of packing/repacking of auto parts - Held that - I find that as the appellant has claimed that on 31.5.2006 there was inventory of stock of finished goods the same was required to be considered by the adjudicating authority and if the same is excluded from the total turnover of the impugned period in that circumstance the turnover fall below the threshold limit of SSI exemption of Notification No.8/03-CE the appellant is not liable to pay duty. These facts are required to be verified by the adjudicating authority. Therefore the matter is remanded back to the adjudicating authority to verify the facts as discussed above on the basis of the documents produced by the appellant. Other issues are kept open for both sides to be agitated before the adjudicating authority - appeal disposed off by way of remand.

Summary

Issues: Appeal against duty demanded for the period from 1.6.2006 to 31.3.2007 regarding the activity of packing/repacking of auto parts and eligibility for SSI exemption.

Analysis:
1. Activity of Packing/Repacking of Auto Parts: The appellant was engaged in the activity of packing/repacking of auto parts, which became excisable from 1.6.2006. The appellant cleared auto parts without payment of duty based on the inventory of stock on 31.5.2006. However, an investigation revealed that the turnover exceeded the SSI exemption threshold, leading to a demand for duty for the entire period.

2. Claim for SSI Exemption: The appellant claimed that goods in packed condition on 31.5.2006 were not liable for duty as they were manufactured before 1.6.2006. The appellant sought the benefit of SSI exemption under Notification No.8/03-CE. The Commissioner (Appeals) did not accept this defense, prompting the appeal.

3. Verification and Remand: The learned AR requested verification of the appellant's claims by the adjudicating authority. The Tribunal, after hearing both parties, found merit in the appellant's argument that if the inventory of finished goods on 31.5.2006 is excluded from the turnover, it may fall below the SSI exemption threshold. Consequently, the matter was remanded to the adjudicating authority for verification based on the documents provided by the appellant.

4. Disposition: The Tribunal disposed of the appeal by way of remand, emphasizing the need for the adjudicating authority to verify the inventory of finished goods on 31.5.2006 to determine the appellant's liability for duty. Other issues were left open for further consideration before the adjudicating authority.

In conclusion, the judgment focused on the crucial aspects of the appellant's claim for SSI exemption and the necessity for proper verification of inventory to ascertain duty liability. The decision to remand the matter back to the adjudicating authority reflects the Tribunal's commitment to ensuring a thorough examination of the facts before reaching a final determination.