2004 (9) TMI 490 - AT - Central Excise

Summary

Issues: Clubbing of clearances for SSI exemption under Notification No. 1/93-C.E. dated 28-2-1993.

Analysis:
The appeal involved the issue of clubbing clearances of two Public Limited Companies for the purpose of Small Scale Industries (SSI) exemption under Notification No. 1/93-C.E. dated 28-2-1993. The appellant was required to pre-deposit duty and penalty for the appeal to be heard. The appellant argued that after an amendment to the notification in 1994, where the word 'manufacturer' was deleted, clubbing clearances by one or more industries was proper. Citing a Supreme Court judgment in a similar case, the appellant contended that there was no financial flow back allegation, and thus, the independent units' clearances should not be clubbed for SSI exemption. The appellant sought total waiver based on strong prima facie merits and referred to relevant judgments to support the case. The respondent, represented by the Senior Departmental Representative (SDR), opposed and suggested putting the appellants to terms.

Upon careful consideration, the Tribunal opined that clubbing of clearances could only be done if there was a free flow of funds with common management as per the terms of the Notification. Since the notification had been amended, the clearance of one or more factories could not be clubbed. The Tribunal found that the citation referred to by the Counsel applied to the case prima facie. Consequently, the Tribunal allowed the stay application by granting full waiver of pre-deposit and staying the recovery until the appeal's disposal. The full waiver was granted under Section 35F of the Appeal, necessitating the appeal to be heard out of turn within 180 days. The Registry was directed to list the appeal for out of turn hearing on 7-3-2005.