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2010 (8) TMI 419 - AT - Central ExciseSSI Exemption - from 1-4-1995 to 22-4-1994 assessee cleared cotton yarn on payment of excise duty at normal rate - From 27-4-1995 to 8-5-1994 they cleared goods availing SSI exemption upto the value of Rs. 30 lakhs excluding the value of goods cleared during the period from 1-4-1995 to 22-4-1995 for the purpose of computation of aggregate value of first clearances for availing the exemption Held that - value of specified goods cleared from the first date of the financial year has to be taken into account for reckoning the aggregate value of clearances, the Larger Bench held that the amount paid by the assessees as duty of excise on cotton yarn cleared from 25-4-1994 until they started availing the benefit of Notification 1/93-C.E. cannot be recognized as duty of excise and have to be treated as bare deposits of money lying with the Government as rightly clarified in the Board s Circular and the amounts are liable to be adjusted against the duty of excise held payable by the assessees in adjudication orders - set aside order and appeal allowed
Issues:
1. Eligibility for SSI exemption under Notification No. 1/93-C.E. 2. Inclusion of the value of goods cleared for computation of aggregate value. 3. Interpretation of the Larger Bench decision regarding duty payment on cleared goods. 4. Adjustment of amounts paid as duty of excise against duty held payable. Eligibility for SSI Exemption: The assessees, manufacturers of cotton yarn, cleared goods during the financial year 1995-96 under SSI exemption. They initially cleared goods on payment of excise duty at the normal rate and later availed the SSI exemption under Notification No. 1/93-C.E. The issue arose when the value of goods cleared initially was included in the aggregate value for exemption calculation, rendering them ineligible for full exemption on subsequent clearances. The Commissioner (Appeals) relied on a decision stating that the value of specified goods cleared from the beginning of the financial year must be considered for computing the aggregate value, leading to a demand for duty payment. Inclusion of Cleared Goods for Aggregate Value: The Tribunal analyzed the Larger Bench decision and noted that while the value of specified goods cleared from the start of the financial year is relevant for aggregate value calculation, the duty paid on goods cleared before availing the SSI exemption cannot be considered as excise duty but as deposits. This interpretation was supported by a Board Circular and a previous Tribunal decision. As the assessees had availed exemption up to the prescribed limit, the Tribunal set aside the order and allowed the appeal based on the principles outlined in the Larger Bench decision and the previous Tribunal ruling. Interpretation of Duty Payment on Cleared Goods: The Tribunal clarified that the duty paid by the assessees on goods cleared before availing the SSI exemption should be treated as deposits, not excise duty. This distinction is crucial in determining the eligibility for exemption and the calculation of aggregate value for exemption purposes. The Tribunal's decision was guided by the interpretation provided in the Board's Circular and a previous Tribunal ruling, ensuring a consistent approach in such cases. Adjustment of Amounts Paid as Duty of Excise: The Tribunal emphasized that the amounts paid by the assessees as duty of excise on goods cleared before availing the SSI exemption should be viewed as deposits with the Government. These amounts are considered liable to be adjusted against any duty of excise held payable by the assessees in adjudication orders. This adjustment principle ensures fairness and accuracy in determining the actual duty liability of the assessees and prevents double taxation or undue financial burden. This detailed analysis of the judgment highlights the complexities involved in interpreting and applying exemption provisions under Notification No. 1/93-C.E. and the significance of distinguishing between duty payments and deposits in excise duty calculations.
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