2012 (3) TMI 368 - AT - Central Excise

Benefit of SSI exemption Notification No. 8/2002-C.E., dated. 1-3-2002 - Confiscation of goods - Imposition of redemption fine - Held that - goods falling under Heading 74.03 are entitled to the benefit of notification. However, exclusion clause takes away the benefit in respect of brass rods of length not exceeding 10 feet used in the factory of production for making wires. Inasmuch as in the present appeal, the brass rods manufactured by the appellant are admittedly more than 10 feet and are used in the same factory for making wires and benefit of SSI exemption notification is not available to the said brass rods. Further the benefit of captive consumption notification is also not available to them, inasmuch as their manufacture attracts nil rate of duty - Redemption fine reduced - Decided partly in favour of assessee.

Summary

Issues:
1. Applicability of SSI exemption Notification No. 8/2002-C.E. to brass rods manufactured by the appellant.
2. Duty liability on brass rods more than 10 feet in length used for wire drawing.
3. Confiscation of goods and imposition of redemption fine and penalty.
4. Interpretation of relevant notification for duty liability on brass rods.

Analysis:
1. The appellant, engaged in the manufacture of brass rods more than 10 feet in length for wire drawing, was availing the benefit of SSI exemption Notification No. 8/2002-C.E. However, the brass rods were excluded from the exemption as per the notification. The authorities held that the appellant should discharge duty liability on the brass rods as they were not eligible for SSI exemption.

2. The original adjudicating authority confiscated the goods seized during transit and from the factory premises, imposing a redemption fine and penalty on the appellant. The authorities directed that the brass rods should be used for further manufacturing of brass wire only on payment of duty. The Commissioner (Appeals) upheld this decision, leading to the present appeal.

3. The appellate tribunal found that the brass rods manufactured by the appellant, being more than 10 feet in length and used for making wires in the same factory, were not eligible for the SSI exemption. The tribunal also noted that the benefit of captive consumption notification was not available, as the manufacture attracted a nil rate of duty. The tribunal upheld the duty liability on the brass rods.

4. Regarding confiscation and penalties, the tribunal considered it a legal and technical issue requiring a detailed analysis of the relevant notification. Giving the appellant the benefit of the doubt, the tribunal reduced the redemption fine and penalty imposed. With modifications in the quantum of the fine and penalty, the appeal was rejected, affirming the duty liability on the brass rods.

This judgment clarifies the duty liability on brass rods exceeding 10 feet in length used for wire drawing, emphasizing the interpretation of relevant notifications and the exclusion from SSI exemption benefits. The decision highlights the importance of compliance with duty obligations and the consequences of non-eligibility for exemptions under specific notifications.