2012 (9) TMI 601 - AT - Central Excise

SSI exemption - Clubbing of turnover - assessee having two units - issuance to SCN to both the units - period of limitation - Held that - the show cause notice to the appellants (i.e. Alang unit) had been issued taking into consideration the clearances effected by the Sihor unit as well as the Alang unit. - Whether the Sihor unit had paid duty at the normal rate or concessional rate or availed full exemption, it would not affect the clubbing of clearance value of Sihor unit with Alang unit for the purpose of availing benefit of Notification No.9/98-CE. The show cause notice issued to the Sihor unit for the same period therefore does not amount to double jeopardy as in that case, the appellants had claimed exemption under Notification No.8/98 dated 2-6-98 which was in contravention of clause 2(v) of the Notification and the issue therefore is different from the issue in the present case. As the fact of availment of exemption on Alang unit was not declared in Rule 173B declaration of Sihor unit, cannot be made the basis for establishing intention on the part of the appellants in as much as admittedly the fact of existence of Alang unit was mentioned in the said declaration - as the demand in the present case is admittedly beyond the normal period of limitation of six months the appellant s appeal of the Sihor unit was allowed only on the limitation - in favour of assessee.

Issues Involved:
Benefit of small scale exemption under Notification No.9/98-CE and 9/99-CE to the appellant for two units; Bar on limitation for show cause notice issued in January 2004 to the Alang unit; Suppression of material facts by the appellant regarding the existence of another unit; Clubbing of clearances of Sihor and Alang units for exemption under Notification No.9/98-CE; Double jeopardy and issue differentiation in the show cause notices; Applicability of the decision in the Sihor unit's appeal to the Alang unit's case.

Analysis:

1. The primary issue in this case pertains to the benefit of small scale exemption under Notification No.9/98-CE and 9/99-CE to the appellant for their two units. The Revenue contended that clubbing the clearances of both units would disqualify the appellant from the SSI notification benefit. The first appellate authority upheld the duty liability, interest, and penalties on the appellant for not declaring the existence of the second unit in Sihor.

2. The second issue revolves around the bar on limitation for the show cause notice issued in January 2004 to the Alang unit. The appellant argued that the notice was time-barred as the facts were within the department's knowledge since an earlier notice to the Sihor unit in 2000. The Tribunal's decision in the Sihor unit's appeal was cited to support the limitation defense.

3. The issue of suppression of material facts by the appellant regarding the existence of another unit was crucial. The first appellate authority found that the appellant had failed to disclose the second unit's details when claiming exemption, leading to the invocation of a longer period of limitation under the Central Excise Act, 1944.

4. Clubbing of clearances of Sihor and Alang units for exemption under Notification No.9/98-CE was another point of contention. The appellant's argument that the clearances should be clubbed as per the notification's provisions was countered by the authorities, leading to the confirmation of the demand and interest.

5. The concept of double jeopardy and issue differentiation in the show cause notices was discussed. The Tribunal differentiated between the issues raised in the notices to the Sihor and Alang units, concluding that the demands were valid for each unit based on their respective contraventions of the exemption notifications.

6. The applicability of the decision in the Sihor unit's appeal to the Alang unit's case was significant. The Tribunal found that since both units fell under the same jurisdictional division and the issue of limitation was similar, the decision favoring the Sihor unit's appeal on limitation applied to the Alang unit as well, leading to the setting aside of the impugned order.

This detailed analysis covers the various issues involved in the legal judgment, highlighting the key arguments, findings, and decisions made by the Tribunal regarding each aspect of the case.

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