2011 (10) TMI 215 - AT - Central Excise

SSI Exemptions - Assessee factory located in rural areas - cleared branded goods sepeartely and paid duty -Show cause notice was issued that assessee wrongly included the value of branded goods and availed SSI benefits - Held - the assessee had never claimed this benefit - Revenue is trying to thrust upon the assessee that the branded goods manufactured were cleared without payment of duty - Revenue could not furnish any evidence or any certificate from the authorities during the relevant time, when the Show Cause Notice was issued. Decided in favour of Assessee.

Summary

Issues:
- Appeal against Order-in-Appeal No. 210/2006(Ahd-II) CE/Raju/Comr(A), dt.20.6.06.
- Applicability of Notification No.9/2003-CE for concessional rate of duty.
- Dispute regarding exemption under Notification No.9/2003.
- Allegation of contravention of conditions under Para 2(vii) read with Para 3A(b) and 4(c) of the said notification.
- Claim of exemption by the assessee for branded goods manufactured on loan license basis.
- Adjudication by lower authorities and subsequent appeals.
- Argument over the factory's location falling under rural area.
- Consideration of evidence and submissions by both parties.
- Decision on whether the appellant can be denied the benefit of Notification No.9/2003-CE.
- Assessment of duty liability on branded goods manufactured by the appellant.
- Evaluation of evidence and onus of proof regarding the factory's location.
- Final ruling and setting aside of the impugned order.

Analysis:
The case involves an appeal against Order-in-Appeal No. 210/2006, concerning the applicability of Notification No.9/2003-CE for concessional duty rates. The appellant, engaged in manufacturing medicaments, availed the benefit of the notification but faced a dispute regarding exemption conditions. The Revenue alleged contravention of specific clauses of the notification, leading to a Show Cause Notice. The adjudicating authority initially dropped the notice, but the first appellate authority reversed this decision, imposing demands, penalties, and interest. The primary contention revolved around the appellant's liability for duty on branded goods manufactured on behalf of loan licensees. The appellant argued that the exemption was not availed as they believed duty was payable on these goods. The dispute extended to the factory's classification under rural area criteria, with conflicting evidence presented by both sides.

The Tribunal analyzed the submissions and records to determine whether the appellant could be denied the notification's benefits. It emphasized the duty liability on branded goods and the onus of proving the factory's rural area status to claim exemption. The Show Cause Notice lacked evidence of the factory's location, crucial for assessing eligibility for the notification. The Tribunal noted the appellant's failure to claim the benefit based on rural area classification, contrary to the Revenue's assertions. Ultimately, the Tribunal found the lower authority's decision flawed, setting it aside and upholding the adjudicating authority's order. The ruling highlighted the importance of evidence and proper documentation in establishing eligibility for duty exemptions under relevant notifications.

In conclusion, the Tribunal allowed the appeal, emphasizing the necessity of substantiating claims with appropriate evidence and complying with notification conditions to avail of duty exemptions. The judgment underscored the significance of meeting criteria and providing proof to support claims, ensuring fair and accurate application of excise duty regulations.