2009 (4) TMI 646 - AT - Central Excise

Summary

Issues involved: Interpretation of Notification No. 8/2003-C.E. regarding exemption limits for excisable goods manufactured in different units of the same manufacturer.

Summary:
The case involved a manufacturer with units in Lalru and Baddi, manufacturing HID Lamps. The manufacturer availed exemption under Notification No. 8/2003 for unbranded goods and under Notification No. 50/2003 for branded goods. A show-cause notice alleged that the total clearances exceeded Rs. 4.00 crores, making the manufacturer ineligible for the exemption. The Commissioner confirmed a duty demand and imposed a penalty. The manufacturer argued that the Baddi unit's goods, exempted under Notification No. 50/03, should not be included in the eligibility limit calculation. The Commissioner's interpretation of clause 3A of Notification No. 8/03 was challenged.

The Tribunal considered both sides' submissions and analyzed the Notification's clauses. It noted that the method for determining the Rs. 1.00 crore exemption limit and the Rs. 4.00 crore eligibility limit were different. The Tribunal found the Commissioner's view on the Rs. 4.00 crore limit determination to be prima facie correct. The manufacturer failed to demonstrate financial hardship. Consequently, the Tribunal held that the manufacturer did not warrant a waiver of dues as per the impugned order.

In light of the circumstances, the Tribunal directed the manufacturer to deposit Rs. 7.5 lakhs within eight weeks and report compliance. Upon this pre-deposit, the Tribunal waived the pre-deposit of the remaining duty amount and the entire penalty until the appeal's disposal. The stay application was disposed of based on these terms.