2015 (10) TMI 1563 - AT - Central Excise

SSI Exemption - manufacture of readymade garments bearing brand name or trade-name of another person - export of goods - contravention of procedures, conditions and provisions specified under Rule 18/ Rule 19 of the Central Excise Rules, 2002 read with Notification No. 42/2001-CE (NT) dated 26.6.2001 - penalty under Rule 25 of the Central Excise Rules, 2002 - Held that - Exemption shall not apply to the goods bearing a brand name or trade name of another person, except where the goods are manufactured in a factory located in Rural Area. In other words, it is clear that if the goods are manufactured by a factory located in Rural Area, as is claimed by the appellants, the goods will be eligible for the SSI exemption granted by the said Notification No. 8/2003-CE dated 01.03.2003. It is further observed that Simplified Export Procedure for export of ready made garments prescribed vide Circular No. 705/21/2003-CX dated 08.04.2003 is meant for exempted units. It is also observed that in the communication dated 25.09.2014, subsequent to the impugned order-in-original, the Assistant Commissioner (Review), Central Excise & Customs, Daman has categorically stated that the ready made garments in question here have been exported. - Matter remanded back - Decided in favour of assessee.

Summary

Issues:
- Whether the appellants are entitled to the benefit of SSI exemption under Notification No. 8/2003-CE dated 01.03.2003?
- Whether the appellants followed the correct procedures for export of excisable goods as specified in Notification No. 42/2001-CE (NT) dated 26.6.2001?
- Whether the demands of duty, fine, and penalty confirmed by the adjudicating authority are legal and justified?
- Whether the appellants are eligible for the Simplified Export Procedure for readymade garments?
- Whether the impugned order-in-original is sustainable or liable to be set aside?

Analysis:

The appeals in this case arose from a common Order-in-Original where the Commissioner of Central Excise & Customs, Daman confirmed a demand of duty, imposed penalties, and confiscated goods exported by the appellants. The issue revolved around the appellants' eligibility for SSI exemption and compliance with export procedures specified under Central Excise Rules. The appellants claimed exemption under Notification No. 8/2003-CE dated 01.03.2003, arguing that they are an SSI unit exporting readymade garments. The adjudicating authority denied this benefit, leading to the demand of duty, penalties, and fines.

During the proceedings, the appellants contended that being situated in a Rural Area, they are entitled to SSI exemption. They also argued that they followed the Simplified Export Procedure for readymade garments. The Revenue, however, insisted that due to non-compliance with procedures, the appellants were not entitled to benefits. The Tribunal considered the submissions and found that the appellants' location in a Rural Area could impact their eligibility for the SSI exemption under Notification No. 8/2003-CE dated 01.03.2003.

The Tribunal observed that the exemption under the notification applies to goods manufactured in a factory located in a Rural Area. It noted that the Simplified Export Procedure for readymade garments is meant for exempted units. Additionally, it was confirmed that the goods in question had been exported. Consequently, the Tribunal concluded that the impugned order-in-original could not be sustained and decided to remand the matter for further examination.

In the final decision, the Tribunal set aside the impugned order-in-original and allowed the appeals by way of remand. It emphasized the need to verify the Rural Area certification and reassess the appellants' eligibility for the SSI exemption and Simplified Export Procedure. The appellants were granted a fair chance of personal hearing in the re-adjudication process. The miscellaneous applications for extension were dismissed as infructuous.