2013 (10) TMI 233 - AT - Central Excise

SSI Exemption - Notification No. 08/2003 - computation of value of clearance of the proceeding year - inclusion of value of branded goods - There is also no dispute to the effect that while computing the threshold limit of ₹ 4 crore, the value of such branded items is not required to be taken into consideration. However, the said medicines manufactured by the appellant with the brand name of other person are exempted in terms of another notification No. 4/06-CE. The Revenue s entire case is that inasmuch as branded goods are exempted in terms of Notification No. 4/06, their clearance value is required to be taken into consideration for computing the eligibility criteria of clearance value of ₹ 4 crores Held that - The Revenue reliance on the earlier stay order of the Tribunal in the case of Astra Lighting Ltd. vs. CCE, Chandigarh 2009 (4) TMI 646 - CESTAT, NEW DELHI , wherein by entertaining prima facie view that clearance of exempted branded goods from a unit located at Baddi unit in Himachal Pradesh after availing exemption notification No. 50/03 CE, are required to be taken into consideration while arriving at the total clearance - Tribunal while passing the said order has not examined the provisions of notification in question in detail and has not referred to said para 3A (b) of the notification. Bar Of Period of Limitation Held that - The demand involved in one of the cases is prima-facie barred by limitation inasmuch as the same is for the period April, 2007 to December, 2007 whereas the show cause notice was issued on 19.8.09 - the department was aware of the facts - Stay granted.

Summary

Issues:
1. Interpretation of small scale exemption notification No. 08/2003-CE.
2. Computation of clearances for eligibility criteria.
3. Consideration of branded goods for total clearances.
4. Application of para 3A(b) of the notification.
5. Comparison with previous Tribunal order in Astra Lighting Ltd. case.
6. Limitation period for demand of duty.

Analysis:
1. The judgment involves the interpretation of small scale exemption notification No. 08/2003-CE concerning the eligibility criteria for availing the exemption. The dispute revolves around the computation of clearances during a specific financial year to determine entitlement to the exemption for the subsequent financial year.

2. The key issue is the consideration of clearances for branded goods in the total value of clearances for determining eligibility. The notification excludes clearances bearing the brand name of another person from the computation of total clearances. The Revenue argued that even though branded goods are exempted under another notification, their value should be included in the total clearances.

3. The judgment extensively analyzes para 3A(b) of the notification, which specifies that clearances of branded goods not eligible for exemption under para 4 should be considered for computing the total clearances. The court emphasized that the exemption under notification No. 8/2003-CE does not apply to goods bearing another person's brand name, irrespective of any other exemption they may qualify for.

4. The comparison with a previous Tribunal order in the Astra Lighting Ltd. case highlighted the distinction in circumstances where area-based exemptions were involved. The court noted that the previous order did not delve into the specifics of para 3A(b) of the notification in question, which was crucial to the current case.

5. Additionally, the judgment addressed the limitation period for the demand of duty, noting that one of the cases was prima facie barred by limitation as the demand was for a period prior to the issuance of the show cause notice. Citing the Nizam Sugar Factory case, the court ruled that demands beyond the limitation period should not require pre-deposit of dues and penalties.

6. Ultimately, the court ruled in favor of the appellant, emphasizing the clear provisions of the notification regarding the exclusion of branded goods from the computation of total clearances. The stay petitions were allowed, and the pre-deposit of dues and penalties was dispensed with in both cases.