2004 (1) TMI 535 - AT - Central Excise

Summary

Issues: Denial of small-scale exemption notification benefit due to clearing goods at normal rate of duty.

The judgment by the Appellate Tribunal CESTAT, New Delhi involved an appeal against the denial of the small-scale exemption notification benefit to the appellants because they cleared certain goods at the normal rate of duty during the financial year. The appellants contended that they had mistakenly cleared goods at the full duty rate due to an error by their manager. Upon realizing the mistake, they filed a refund claim for the excess duty paid, as they were availing the small-scale exemption notification. The Deputy Commissioner sanctioned the refund. The appellants argued that the denial of the exemption was unjustified as they were not allowed to withdraw from the notification during the same financial year once opted. On the other hand, the Revenue contended that the appellants violated the notification conditions by paying the normal duty rate, hence not entitled to the exemption.

The Revenue did not dispute that the appellants had opted for the small-scale exemption notification from a specific date. The appellants had cleared goods at the normal duty rate, leading to a refund claim approved by the Deputy Commissioner due to excess duty payment while availing the exemption. The Tribunal noted that as per the notification provisions, a manufacturer opting for the small-scale exemption could not withdraw during the same financial year. Considering this condition and the fact that the excess duty paid was refunded by the Revenue, the Tribunal found the denial of the exemption unjustifiable. Consequently, the order denying the benefit of the small-scale exemption notification was set aside, and the appeal was allowed.