2003 (9) TMI 691 - AT - Central Excise

Summary

Issues:
1. Appeal against Order-in-Appeal No. 94-CE/GZB/2003.
2. Consideration of units clandestinely operating for production and clearance.
3. Eligibility of units for exemption under Notification No. 8/2000.
4. Requirement of registration with the Central Excise Department for exemption.
5. Departmental appeal sustainability based on registration criteria.
6. Policy on registration of small and tiny units for exemption.

Analysis:

1. The appeal was filed against Order-in-Appeal No. 94-CE/GZB/2003, which highlighted the clandestine operation of multiple units for the production and illicit clearance of electrical items. The appellant was found to have non-declarant units not registered with the Central Excise Department, leading to a lack of details for computing the exemption limit under Notification No. 8/2000. The Additional Commissioner's failure to thoroughly examine the units' eligibility for Small Scale Industry (SSI) benefits under the said notification was noted, resulting in the allowance of the departmental appeal.

2. The appellant's counsel argued that the order did not address the appeal's grounds, emphasizing that the units' lack of registration with the Central Excise Department should not disqualify them from benefits under Notification No. 8/2000. The counsel cited established law stating that SSI exemption is not contingent upon registration. Reference was made to a Tribunal decision supporting this position.

3. Upon review and hearing the SDR, it was observed that the Department did not dispute the adjudication order's finding on the units' eligibility for exemption based on cleared goods' value. The exemption notification did not mandate Central Excise Department registration for units. The Department's policy did not require registration for small and tiny units to avoid unnecessary burdens on manufacturers and departments. The issue was also favorably settled in a previous Tribunal order.

4. Consequently, the appeal was allowed, overturning the impugned order. The decision was based on the lack of necessity for unit registration with the Central Excise Department for exemption under Notification No. 8/2000. The policy stance of not imposing registration requirements on small and tiny units further supported the appellants' position, leading to the setting aside of the initial order.