2009 (12) TMI 768 - AT - Central Excise

Issues:
1. Eligibility for SSI exemption under Notification No. 9/98-C.E.
2. Allegation of being related to another company affecting SSI benefit claim.
3. Denial of SSI benefit and imposition of penalties.
4. Duty leviable on goods manufactured and cleared.
5. Appeal against sustained order of adjudication by Commissioner (Appeals).

Eligibility for SSI exemption under Notification No. 9/98-C.E.:
The appellant claimed entitlement to SSI exemption under Notification No. 9/98-C.E. for a specific period. The original authority denied this benefit, alleging the appellant was related to another company, hence ineligible for SSI benefit. The appellant appealed against this denial, arguing that they should be granted the benefit if they fulfilled the conditions of the notification. The Tribunal found that the appellant, despite being related to another company, operated independently in manufacturing specified goods. As long as the turnover fell within the prescribed limit, the SSI benefit should not be denied solely based on the relationship between top functionaries of the appellant and the other company.

Allegation of being related to another company affecting SSI benefit claim:
The Department alleged that the appellant was 'part and parcel' of another company and fraudulently availed SSI benefit by suppressing facts. It was revealed that the appellant operated from a factory leased from the other company, paying rent for various facilities. Directors of both companies were related, forming the basis of the relationship theory. However, the Tribunal observed that the appellant functioned independently in manufacturing and clearing goods, indicating eligibility for SSI benefit based on meeting the notification's conditions, irrespective of the relationship with the other company.

Denial of SSI benefit and imposition of penalties:
The adjudicating authority initially denied SSI benefit to the appellant and imposed penalties under relevant sections. The Commissioner (Appeals) upheld this decision without providing reasons. The Tribunal, after examining the case and finding no basis to deny the SSI benefit, set aside the orders of both lower authorities. Considering the dispute's age, the Tribunal decided against remanding the case and allowed the appeal, providing consequential relief to the appellant.

Duty leviable on goods manufactured and cleared:
The Department argued that duty on goods manufactured and cleared from the factory leased by the appellant had to be paid by them. The Tribunal noted that the appellant functioned independently in manufacturing and clearing goods, and as long as they met the conditions of the SSI notification, they were entitled to the benefit. The duty demand was not based on production in multiple factories or by multiple manufacturers, but on the appellant's own operations, justifying the grant of SSI benefit.

Appeal against sustained order of adjudication by Commissioner (Appeals):
The appellant's appeal was initially dismissed by the Commissioner (Appeals), upholding the denial of SSI benefit and imposition of penalties. The Tribunal, after thorough examination, found no justification to deny the benefit to the appellant and set aside the orders of both lower authorities, granting relief to the appellant. The Tribunal's decision was based on the appellant's independent manufacturing operations and compliance with the conditions of the SSI notification, rather than the alleged relationship with another company.

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