2017 (6) TMI 622 - AT - Central Excise

SSI exemption - aggregate value of clearances have to be quantified after taking into consideration of the goods cleared under concessional rate of duty as well as full rate of duty - Held that - it has been established that the purported clearances of brand name owners have not satisfied the conditionalities provided in the notification the value of clearances thereof will necessarily have to be added to the aggregate clearances even if there is mention of the brand name in the invoices - differential duty liability if any will start ticking once the value of the clearances already made by thee assessee in availing benefit of notification and value of the disputed brand name clearances are added and the total thereof exceeds the exemption slabs of Rs. 50 lakhs and Rs. 100 lakhs respectively - appeal allowed by way of remand.

Summary

Issues:
Dispute on avaliment of SSI exemption Notification No.9/1999 dated 28.02.1999.

Analysis:
The case involved a dispute regarding the availing of SSI exemption under Notification No.9/1999. The department alleged that the respondent had irregularly availed the exemption, leading to a demand for differential duty, interest, and penalties. The Commissioner (Appeals) set aside the original order and remanded the matter for fresh consideration. The department appealed this decision.

During the hearing, the Revenue argued that the respondent had cleared goods at different duty rates to the same customers without proper branding, which should disqualify them from the exemption. They relied on a Tribunal decision to support their stance.

On the other hand, the respondent's advocate argued that as long as the brand name was mentioned in the invoices, it should not be considered a violation. They cited Supreme Court and High Court judgments to support their position.

After hearing both sides and examining the facts, the Tribunal found that the respondent had deliberately made clearances in violation of the notification conditions. However, they disagreed with the Revenue's argument that this would result in a total denial of the exemption from the beginning of the financial year. The Tribunal held that while the respondent's actions were calculated to stay within the exemption limit, they could not be denied the benefit ab initio. The value of non-compliant clearances would need to be added to the aggregate, but this would not lead to a total denial of the exemption.

The Tribunal ordered a remand to recalculate the duty liability based on the revised clearances. They also upheld the penalty but linked it to the revised duty liability amount. The penalty under Rule 173 Q was waived. The department's appeal was partly allowed, leading to a remand for further proceedings.