2012 (6) TMI 198 - AT - Central Excise

SSI exemption - denial of exemption for Yr 1990-91 on ground that aluminum circles cleared during the period 1989-90 as exempted goods, cannot be treated as exempted goods and consequently the total value of clearances exceeded the limit of Rs 2 Crores - Held that - It is undisputed that during 1989-90, the appellant had manufactured and cleared the aluminum circles without recording the same and Notification No.180/1988 was applicable in the cases of goods manufactured. Prior to 25.07.91, the benefit of Notification No.180/1988-CE, cannot be denied to the appellant even if the product manufactured by him was cleared without accounting. If that be so, the aggregate value of such clearances under Notification No.180/1988 cannot be considered for the purpose of aggregate value of clearances made during the F.Y. 1989-90, which would mean that the appellant had not crossed the threshold limit of Rs.2 Crores for denying him the benefit of SSI Notification No.175/86-CE for the year 1990-91 - Decided in favor of assessee Whether the pat scrap was excisable to Excise duty - Held that - Since adjudicating authority in his impugned order has not at all discussed how the duty liability on scrap arises if there is no manufacturing of scrap, hence, we remand the matter back to the adjudicating authority on this point to reconsider the issue afresh.

Summary

Issues:
1. Interpretation of Notification No.175/86-CE for SSI exemption.
2. Determination of duty liability on pat scrap.

Analysis:

Issue 1: Interpretation of Notification No.175/86-CE for SSI exemption:
The appellant contested the denial of SSI exemption for the year 1990-91 by the Department based on the value of clearances exceeding Rs.2 Crores in the preceding year. The appellant argued that certain clearances should not be considered for the threshold calculation as per the provisions of the notification. The Tribunal found that the appellant's aluminum circles cleared in 1989-90 were exempted goods due to a brand name, thus not to be included in the threshold calculation. The Tribunal also highlighted the impact of the amendment introduced by Notification No.63/91-CE on the benefit of Notification No.180/1988, allowing the appellant to claim SSI exemption for 1990-91. Consequently, the duty liability calculation for 1990-91 was directed to be re-quantified based on this finding, remanding the matter for further assessment.

Issue 2: Determination of duty liability on pat scrap:
The appellant raised a contention that pat scrap resulting from the manufacture of aluminum circles should not attract duty as it is not considered manufactured. The Tribunal noted the lack of discussion by the adjudicating authority on this matter and the absence of a clear finding on the duty liability of pat scrap. Hence, the Tribunal remanded the issue back to the adjudicating authority for a fresh assessment, emphasizing the need for a clear determination of duty liability on pat scrap during the relevant period. The appellant was instructed to cooperate with the lower authority during the reassessment process.

In conclusion, the Tribunal upheld the penalties imposed on certain parties but remitted the matter back to the lower authorities to decide on the appellant's entitlement to SSI exemption and the duty liability on pat scrap. The judgment provided detailed analysis and interpretations of relevant notifications and legal principles, ensuring a comprehensive review of the issues raised in the appeal.