2015 (7) TMI 1188 - AT - Central Excise

SSI exemption - value of clearances - denial on the ground that the value of the clearance of all excisable goods exceeded ₹ 3 crores for the year 2002-2003 - Held that - the appellant s contention that regarding exempted goods, Sprinkler System, etc. should not be included in the turnover is not tenable. Further, exclusion of the items purchased by them but cleared along with the Sprinkler System as a whole is also not permissible as the Sprinkler System and part thereof are cleared together as exempted goods - Further, it is seen that in spite of Board s Circular dated 6-8-2003 and Budget Clarification dated 28-2-2003, the appellant continued to follow their own way of calculating the turnover - exemption not allowed - appeal dismissed - decided against appellant.

Issues involved:
1. Eligibility for SSI exemption under Notification No. 9/2003-C.E.
2. Inclusion of exempted goods in the calculation of turnover.
3. Exclusion of certain goods from the turnover calculation.
4. Imposition of penalty on the Managing Director.
5. Calculation of aggregate value of clearances of excisable goods for the year 2002-2003.

1. Eligibility for SSI exemption under Notification No. 9/2003-C.E.: The appellants were engaged in the manufacture of PVC Pipes/HDPE Pipes and Sprinkler Irrigation System, availing SSI exemption under Notification No. 9/2003-C.E. for the year 2003-2004. However, the Revenue found that the value of clearances of all excisable goods exceeded the prescribed limit of Rs. 3 crores for the year 2002-2003, rendering them ineligible for the exemption for the subsequent year.

2. Inclusion of exempted goods in the calculation of turnover: The issue revolved around the method of calculating the aggregate value of clearances of excisable goods for the year 2002-2003. The Circular clarified that the value of exempted goods, excluding exports, should be included in determining the eligibility limit of Rs. 3 crores from 1-4-2003 onwards. The Tribunal rejected the appellant's contention that certain exempted goods like Sprinkler System should not be included in turnover, emphasizing that the appellant's method of calculating turnover deviated from the prescribed guidelines.

3. Exclusion of certain goods from the turnover calculation: The appellant argued for the exclusion of intermediate goods' value, duty paid on such goods, and the value of purchased and sold goods from the turnover calculation. However, the Tribunal held that the exclusion of items purchased but cleared along with the Sprinkler System was impermissible as they were cleared together as exempted goods, finding no merit in the appellant's plea on these grounds.

4. Imposition of penalty on the Managing Director: The order-in-original imposed a penalty on the Managing Director, which was upheld by the ld. Commissioner (Appeals). Nonetheless, the Tribunal set aside the penalty on the Managing Director, providing partial relief to the appellant in this regard.

5. Calculation of aggregate value of clearances of excisable goods for the year 2002-2003: The Tribunal found no infirmity in the demand raised based on the investigation and private records of the appellants despite the Circular and Budget Clarification directing the inclusion of exempted goods in turnover calculation. The appellant's failure to adhere to the prescribed method of turnover calculation led to the dismissal of the appeal.

This detailed analysis of the judgment highlights the key issues addressed by the Tribunal regarding the eligibility for SSI exemption, turnover calculation, penalty imposition, and adherence to prescribed guidelines in excise duty matters.

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