2014 (7) TMI 312 - AT - Central Excise

SSI Exemption - Manufacture of branded goods - Rural area - Held that - jurisdictional Tehsildar has certified that the village in which the assessee s unit located is in rural area. Commissioner has not acted on the certificate of the Tehsildar. Support was also taken from rulings being 2008(223) ELT 218, 2009(233) ELT 386 and 2010 (261) ELT 241. It is further contended that the Revenue has not brought any evidence on record to show that the appellant unit is not an SSI unit situated in rural area and further contended that no case of any fraud, suppression etc. is made out under the facts and circumstances and prayed for dropping of the show-cause notice. - in the interest of justice, the matter needs to be remanded for a fresh consideration by the adjudicating authority as a prima facie case has been made out by the appellant in view of the documents perused by this Tribunal, some of which were not before the adjudicating authority - stay granted partly - appeal allowed by way of remand.

Summary

Issues:
1. Eligibility for SSI exemption on branded goods
2. Classification of the unit as situated in a rural area
3. Imposition of penalty and interest by the Commissioner

Issue 1: Eligibility for SSI exemption on branded goods
The appellant, an SSI unit manufacturing mattresses, claimed exemption under Notification No.8/2003-CE for manufacturing branded goods for another entity. The Revenue issued a show-cause notice alleging irregular exemption claim and incorrect valuation. The appellant argued that it qualified for the exemption as the unit was in a rural area and had paid duty after exceeding the exemption limit. They cited certificates from authorities and relevant case laws supporting their claim. The Commissioner upheld the demand, citing the area's inclusion in HUDA/HMDA, questioning the authenticity of certificates, and alleging deliberate exemption claim and suppression of facts.

Issue 2: Classification of the unit as situated in a rural area
The Commissioner's order highlighted the area's inclusion in HUDA/HMDA, implying it was no longer rural. The appellant presented documents showing the unit was in a grampanchayat, not an urban area, and the village's upgrade to a nagar panchayat in 2013. The Tribunal found a prima facie case for the unit being in a rural area based on the documents provided, remanding the matter for fresh consideration by the Commissioner.

Issue 3: Imposition of penalty and interest by the Commissioner
The Tribunal, upon reviewing the documents not considered by the adjudicating authority, remanded the case for fresh consideration. It set aside the Commissioner's order and directed the appellant to deposit a specified amount within a timeline. The decision was based on the need for a reevaluation considering the new evidence and legal provisions, ensuring a fair process for the appellant.

In conclusion, the judgment addressed the issues of SSI exemption eligibility, rural area classification, and penalty imposition, emphasizing the importance of proper documentation, legal provisions, and a fair adjudication process. The Tribunal's decision to remand the case for reevaluation based on new evidence demonstrates a commitment to justice and thorough examination of all relevant factors.