2005 (4) TMI 497 - AT - Central Excise

Summary

Issues:
1. Waiver of pre-deposit of duty and penalty under Notification 9/2003 for manufacture of PP medicament exceeding the exemption limit.

Analysis:
The judgment before the Appellate Tribunal CESTAT, Mumbai involved an application for waiver of pre-deposit of duty amounting to Rs. 6,39,295/- and penalty of Rs. 50,000/- arising from the order of the Commissioner of Central Excise (Appeals), Vadodara. The issue at hand was the confirmation of duty demand due to the contention that the applicants, engaged in manufacturing PP medicament under loan license agreement and availing SSI exemption under Notification 9/2003, were not entitled to the concessional rate of duty as their clearances exceeded Rs. 3.00 crores in the financial year 2002-2003. The Tribunal considered the argument that clearances of their own goods should not be clubbed with those of branded goods produced for loan license holders under specific provisions of the notification.

Upon hearing both parties, the Tribunal found merit in the applicants' submission that the clearances of branded goods, where the brand name belongs to another person, should not be considered while computing the aggregate value of clearances under the notification. By excluding the clearance value of branded goods, the applicants remained within the prescribed ceiling limit of Rs. 3.00 crores for the financial year 2002-2003, making them prima facie eligible for the small scale concession under the notification for the subsequent year 2003-2004. The Tribunal's view was supported by a previous order of the Tribunal reported in 2002 (140) E.L.T. 232 (CCE, New Delhi v. Products & Ideas), reinforcing the eligibility of the applicants for the concession.

In light of the above analysis, the Tribunal granted the waiver of pre-deposit of duty and penalty, and stayed the recovery pending the appeal. The decision was based on the interpretation of the provisions of Notification 9/2003 and the specific exclusion of clearances of branded goods from the computation of aggregate value, ultimately determining the eligibility of the applicants for the small scale concession under the notification.