2009 (6) TMI 750 - AT - Central Excise

SSI Exemption - Aggregate value of clearances - whether the value of clearances of corrugated cartons and duplex boxes when the merchant exporters who in turn used the same for packing frozen marine products which were exported by them from their factories is required to be taken into account for competition of aggregate value of clearances for the purpose of deciding the eligibility under N/N. 8/2002 available to small scale industrial units? - Held that - there is no dispute that carton boxes supplied by the appellants to the merchant exporters have been used for packing export goods which is also on record that appellants have produced Form-H as well as the relevant enclosures which show that goods have been exported and cartons supplied by them have been used for that purpose - appeal allowed.

Summary

Issues:
Whether the value of clearances of corrugated cartons and duplex boxes used for packing export goods should be considered for determining eligibility under Notification No. 8/2002 for small scale industrial units.

Analysis:
The appeal in question revolved around the specific issue of whether the value of clearances of corrugated cartons and duplex boxes supplied to merchant exporters for packing frozen marine products, which were subsequently exported, should be included in the aggregate value of clearances for determining eligibility under Notification No. 8/2002 for small scale industrial units. The advocate for the appellants argued that the only non-compliance was the lack of registration with the Central Excise Department, but the goods were cleared following export procedures. The advocate referred to a previous Tribunal decision in Vadapalani Press case, where it was held that the value of cartons supplied to merchant exporters need not be added to the value of clearances if the cartons were used for packing export goods and supplied based on Form-H. Additionally, the advocate cited a Supreme Court decision emphasizing that substantive conditions being met entitle to benefits even if procedural conditions are not fulfilled. The Departmental Representative did not provide any contrary judicial decision to oppose the appellants' contentions.

The Tribunal carefully considered the arguments presented by both parties. It was acknowledged that the carton boxes supplied by the appellants were indeed used for packing export goods, supported by the submission of Form-H and relevant enclosures indicating the export of goods. The Tribunal also noted the detailed discussion on Circulars issued by the Board in the Vadapalani Press case. In alignment with the reasoning adopted in the Vadapalani Press case, the Tribunal concluded in favor of the appellants, allowing the appeal with consequential relief. The decision highlighted the importance of meeting substantive conditions for availing benefits, even if procedural conditions are not strictly fulfilled.

This judgment underscores the significance of fulfilling substantive conditions for availing benefits under relevant notifications and regulations, emphasizing the practical application of rules in specific scenarios. The reliance on previous judicial decisions and interpretations of circulars by the Tribunal showcases the importance of legal precedents in guiding current judgments. The Tribunal's decision serves as a reminder of the nuanced approach required in evaluating eligibility criteria for exemptions and benefits, balancing procedural compliance with substantive fulfillment of conditions.