2008 (1) TMI 671 - AT - Central Excise

Summary

Issues:
1. Interpretation of small-scale exemption eligibility post-merger of companies.

Analysis:
The appeal in this case was against the order of the Commissioner (Appeals) regarding the small-scale exemption claimed by the appellant for a merged entity. The appellant, represented by a Chartered Accountant, argued that after the merger of the companies, no clearances should be considered for the earlier period when determining eligibility for the exemption. The appellant claimed that the clearances made by the predecessor units should not be taken into account for the newly constituted unit. However, the Commissioner (Appeals) upheld the decision of the Original Authority.

The key contention was whether, post-merger, the newly formed entity could be considered as a single legal entity for the purpose of claiming small-scale exemption. The Tribunal noted that the benefit of the exemption is subject to the condition that the clearances of all excisable goods by the manufacturer should not exceed a certain limit. The Tribunal emphasized that after the merger, there was only one legal entity formed, despite the two premises being referred to as Unit-A and Unit-B. The Tribunal highlighted that the newly emerged entity had taken over the assets and liabilities of both merging units, and therefore, the clearances of the predecessor units should be treated as clearances by the newly formed unit.

Ultimately, the Tribunal rejected the appeal, affirming the decision of the Commissioner (Appeals). The Tribunal concluded that the findings and reasoning of the Commissioner (Appeals) were sound, as the clearances of the predecessor units had to be considered as clearances by the merged entity. The judgment was pronounced on 8-1-2008 by Member (T) M. Veeraiyan.