2015 (1) TMI 1034 - AT - Central Excise

Waiver of pre deposit - SSI exemption - assembly / manufacture of amplifier speakers with or without FM radio - putting brand name - Notification No. 8/2003-C.E., dated 1-3-2003 - Held that - Prima facie, the demand relating to amplifier speakers without FM radio confirmed by treating the processes of putting others brand names and repacking as amounting to manufacture would be difficult to sustain in the absence of any deeming provision to treat these processes as amounting to manufacture. However, putting the brand names of others on the amplifier speakers with FM radio bought from others would amount to manufacture in view of the above-referred deeming provision and consequently these goods will be liable to duty because goods bearing brand names of others are not eligible for SSI exemption as per para 4 of SSI exemption Notification No. 8/2003-C.E., dated 1-3-2003. - amplifier speakers with or without FM radio manufactured by them and cleared under their own brand name would be eligible for SSI exemption under Notification No. 8/2003-C.E., dated 1-3-2003 as their clearances were below the threshold limit. - it is not necessary to verify these figures at this stage or to delve deep into the possibility of the suppliers/buyers of speakers being related to the appellants for the mere purpose of arriving at a reasonable figure for pre-deposit for the purpose of fulfilment of the requirements of Section 35F of the Central Excise Act, 1944. As the duty confirmed is of the order of ₹ 88 lakhs, a pre-deposit of ₹ 22 lakhs will fairly serve the said purpose. - Partial stay granted.

Summary

Issues:
Classification of multimedia speakers under Central Excise Tariff Headings, Deeming provision for manufacture, Eligibility for SSI exemption under Notification No. 8/2003, Pre-deposit amount determination.

Classification of Multimedia Speakers:
The case involved a dispute regarding the classification of multimedia speakers under different Central Excise Tariff Headings. The Commissioner's order classified multimedia speakers without FM radio under Heading No. 85184000 and those with FM radio under Heading No. 85279990. The department argued that speakers with FM radio should fall under Heading 85.27. The Tribunal observed that speakers without FM radio would fall under Heading 85.18, while those with FM radio would be more appropriately classified under Heading 85.27. The deeming provision under Section 2(f)(iii) of the Central Excise Act, 1944, stated that putting a brand name or repacking would amount to manufacture, affecting the eligibility for SSI exemption under Notification No. 8/2003.

Deeming Provision for Manufacture:
The deeming provision in the Central Excise Act, 1944, played a crucial role in determining the classification and eligibility for exemption. Goods cleared after putting others' brand names would not be eligible for SSI exemption, as claimed by the appellants. The provision differentiated between goods falling under Heading 85.18 and Heading 85.27, impacting the duty liability based on the manufacturing process and brand labeling.

Eligibility for SSI Exemption under Notification No. 8/2003:
The appellants contended that their amplifier speakers, whether with or without FM radio, cleared under their own brand name, qualified for SSI exemption under Notification No. 8/2003. The Tribunal acknowledged that clearances below the threshold limit would be eligible for the exemption, emphasizing the importance of proper classification and adherence to statutory provisions for claiming exemptions.

Pre-deposit Amount Determination:
Considering the duty amount confirmed by the Commissioner, the Tribunal ordered the appellants to make a pre-deposit of &8377; 22 lakhs, emphasizing compliance with Section 35F of the Central Excise Act, 1944. Failure to report compliance by the specified date would lead to the rejection of the appeal for non-compliance. The pre-deposit requirement aimed to ensure fulfillment of statutory obligations pending the final resolution of the appeal.

This detailed analysis of the legal judgment highlights the key issues of classification, deeming provision for manufacture, eligibility for SSI exemption, and pre-deposit amount determination, providing a comprehensive understanding of the Tribunal's decision and the legal implications involved in the case.