2006 (6) TMI 314 - AT - Central Excise

Summary

Issues:
1. Denial of SSI Exemption under Notification No. 9/99 due to non-inclusion of intermediate product value in assessable value.

Analysis:
The appeal before the Appellate Tribunal CESTAT, Bangalore stemmed from the Order-in-Appeal setting aside the Order-in-Original passed by the Additional Commissioner. The core issue revolved around the denial of the Small Scale Industries (SSI) Exemption under Notification No. 9/99. The Revenue contended that the value of the intermediate product Alkyl Resin, cleared from Unit-I to Unit-II of the same manufacturer, was not included in the assessable value. Consequently, it was argued that if this value was added, the clearance figure would surpass the exemption limit, thus disqualifying the benefit.

The Commissioner delved into the matter, drawing parallels with a previous judgment by the Apex Court in the case of CCE, Ahmedabad v. Jalaram Wood Crafts (P) Ltd. The Commissioner noted that the Department's proposal to include the value of Alkyl Resin in the assessable value to deny the SSI exemption was unfounded. It was highlighted that both Unit-I and Unit-II were treated as a single unit for duty payment, as evident from the Show Cause Notice. Further scrutiny revealed that the value of Alkyl Resin was already accounted for in the total clearance value, as reflected in the RT 12s submitted by the assessee. The Commissioner emphasized the absence of any intent to evade duty payment, leading to the conclusion that there was no basis for increasing the aggregate clearance value for the relevant year.

Upon hearing arguments from both sides, the Tribunal, after careful consideration, upheld the application of the Apex Court judgment to the present circumstances. It was determined that the value of goods cleared to Unit-II on duty payment should not be added to the assessable value of Unit-I. The Tribunal found no legal flaws in the impugned order, affirming that the Apex Court's ruling was applicable to the case at hand. Consequently, the appeal was dismissed, emphasizing that there was no merit in challenging the decision based on the established legal principles.