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2010 (9) TMI 456 - AT - Central ExciseSSI Exemption Exemption availed for one unit and paid duty at normal rate for other units - appellant started paying duty at the normal rate in respect of one unit and started clearing SSI exemption for second unit in respect of the same goods - a manufacturer exercising the option at normal rate it shall be with respect to the clearance made by from all its factories and as the manufacturer started paying duty at the normal rate at the beginning of the financial year in one unit therefore in respect of the other unit the manufacturer is not entitled to avail the benefit of SSI notification.
Issues: Recovery of duty and imposition of penalty under Show Cause Notice; Interpretation of Notification No. 1/93-C.E. regarding SSI exemption for goods manufactured from multiple factories.
Analysis: 1. Recovery of duty and penalty under Show Cause Notice: The case involved a Show Cause Notice for the recovery of duty amounting to Rs. 36,814 and imposition of penalty. The respondents had two factories, with one factory availing the benefit of SSI exemption while the other factory cleared goods at the full rate of duty. The adjudicating authority confirmed the demand and imposed the penalty, which was set aside by the Commissioner (Appeals). 2. Interpretation of Notification No. 1/93-C.E.: The Revenue contended that as per Notification No. 1/93-C.E., a manufacturer exercising the option to pay duty at the normal rate should apply the same option to all its factories. Since the manufacturer began paying duty at the normal rate for one unit at the start of the financial year, they argued that the benefit of SSI notification could not be availed for the other unit. However, a detailed examination of Notification No. 1/93 dated 28-2-1993 revealed that the manufacturer has the discretion to choose whether to pay duty or claim SSI exemption for the goods manufactured from one or more factories. In this case, the appellant opted to pay duty at the normal rate for one unit while claiming SSI exemption for the second unit for the same goods. Consequently, the Tribunal found the Commissioner (Appeals)'s decision to be unsustainable and set it aside, allowing the appeal and disposing of the cross objection accordingly.
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