2010 (11) TMI 121 - AT - Central Excise

SSI Exemption Captive consumption plastic sheets captively consumed - respondents are not claiming any relief under paragraph 3(c) of Notification No. 16/97 - total value of clearances of plastic sheets below the specified limit of aggregate clearances - Under paragraph 3(a) the exempt clearances of plastic articles in any case excluded from computing the aggregate value of clearance - respondents on merit eligible for the small scale exemption in respect of the plastic sheets under the main provisions of Notification No. 16/97 - appeal filed by the Department has no merit and dismissed

Summary

Issues:
Interpretation of Notification No. 16/97-C.E. regarding small scale exemption for captively consumed plastic sheets.

Analysis:
The case involved a dispute regarding the eligibility of an appellant for small scale exemption under Notification No. 16/97-C.E. The respondents were manufacturing plastic articles exempted under a specific notification. The Department contended that an amendment to the notification precluded the exemption for captively consumed plastic sheets used as inputs. The Tribunal analyzed the relevant provisions of the notifications and found that the amendment merely imposed a restriction on the computation of aggregate clearances, stating that inputs shall not be deemed exempt for this purpose. It was clarified that the provision aimed at excluding the value of exempt goods from the calculation of aggregate clearances.

Furthermore, the Tribunal noted that the respondents were not seeking relief under the specific provision mentioned in the amendment. Their total value of clearances for plastic sheets fell below the specified limit, as recognized by the lower appellate authority. The Tribunal emphasized that under the main provisions of Notification No. 16/97, exempt clearances of plastic articles were already excluded from computing the aggregate value of clearance. Consequently, the respondents were deemed eligible for the small scale exemption for plastic sheets, as correctly granted by the lower appellate authority.

In conclusion, the Tribunal dismissed the appeal filed by the Department, ruling that the respondents were entitled to the small scale exemption for captively consumed plastic sheets under the main provisions of the notification. The decision was based on a thorough analysis of the relevant provisions and the specific circumstances of the case, affirming the lower appellate authority's decision in favor of the respondents.