2007 (2) TMI 439 - AT - Central Excise

Summary

Issues:
1. Waiver of predeposit and stay of recovery in respect of duty demand for the financial year 2005-06.
2. Claim of SSI benefit under Notification No. 8/2003-CE dated 1-3-2003.
3. Determination of aggregate value of clearances for the period April 2004 to March 2005.
4. Eligibility for SSI benefit based on correct determination of aggregate value of clearances.
5. Benefit of Cenvat credit claimed by the appellant.

Analysis:
1. The judgment pertains to an application for waiver of predeposit and stay of recovery concerning a duty demand of Rs. 70,418 for the financial year 2005-06. The appellants, engaged in biscuit manufacturing, claimed SSI benefit under Notification No. 8/2003-CE, stating their clearances did not exceed Rs. 4.00 crores. However, the dispute arises from the determination of the aggregate value of clearances for the period April 2004 to March 2005. The lower authorities correctly found that the aggregate value should include branded clearances eligible for exemption, which the appellants had omitted. This omission led to the aggregate value exceeding Rs. 4.00 crores, making them ineligible for SSI benefit in the subsequent year.

2. The judgment highlights that the appellants failed to include branded clearances, attracting exemption due to the factory's location in a rural area, when determining the aggregate value of clearances for 2004-05. Had they done so, the value would have surpassed Rs. 4.00 crores, rendering them ineligible for SSI benefit for 2005-06. The court found no prima facie case against the duty demand, emphasizing the correct inclusion of all eligible clearances in the aggregate value calculation.

3. The learned counsel representing the appellants claimed the benefit of Cenvat credit but did not provide quantification or supporting materials for the claim applicable to the disputed period. As a result, the appellants were directed to predeposit the entire duty amount within four weeks and report compliance by a specified date, indicating the necessity for fulfilling financial obligations pending further proceedings.

In conclusion, the judgment underscores the importance of accurately determining the aggregate value of clearances for availing benefits under relevant notifications and the obligation to comply with predeposit requirements in duty-related disputes, emphasizing the need for substantiating claims such as Cenvat credit with appropriate documentation.