2016 (1) TMI 152 - AT - Central Excise

Disallowance of the benefit of value based SSI exemption under Notification No. 08/2003-CE - whether appellant has crossed the exemption limit of ₹ 4.00 crores under Notification No. 8/2003-CE or not - Held that - If cost of bought out items, freight incurred in despatch of excisable goods & element of excise duty is taken out of the contracted value then the value of clearances made by the appellant in each of the relevant financial years will be within the Small Scale exemption. As the issue involved in these proceedings lie in a narrow compass, therefore, after allowing the stay applications, appeals themselves are taken up for disposal. It is observed from the case records that main appellant M/s. Mahindra Tubes (P) Ltd. asked for certain deductions from the value of clearances computed by the Revenue. - No such calculations or Chartered Accountant s certificate was even produced by the appellant before us. In the absence of any such quantification it was difficult for the adjudicating authority to make out any head or tail of the submissions made by the appellant. These verifications have to be made by the Adjudicating authority on production of such quantification C.A. s certificates claimed by the appellant. The matter is, therefore, remanded to the Adjudicating authority for de novo consideration after affording an opportunity of personal hearing to the appellants. Appellants should produce the relevant data /C.A. certificate before the Adjudicating authority during remand proceedings - Decided in favour of assessee.

Summary

Issues involved:
Whether the appellant crossed the exemption limit of Rs. 4.00 crores under Notification No. 8/2003-CE by not excluding the cost of bought out items, freight incurred in despatch of excisable goods, and excise duty from the contracted value.

Analysis:
The appeals and stay applications were filed against an Order-in-Original confirming a demand of Rs. 1,12,07,658 against the appellant, M/s. Mohindra Tubes (P) Ltd., along with penalties imposed on the appellant and another individual under Rule 26 of the Central Excise Rules, 2002. The appellant argued that they were disallowed the benefit of SSI exemption under Notification No. 08/2003-CE due to the inclusion of certain items in the value of clearances, which, if excluded, would keep the value below Rs. 4.00 crores. The appellant contended that all relevant documents were submitted to the Adjudicating authority, but their submissions were ignored. The Revenue argued that the appellant failed to provide a Chartered Accountant's Certificate to substantiate the exclusion of bought out items and freight from the value of clearances. The Adjudicating authority upheld the demand, leading to the appeal.

The main issue was whether the appellant had exceeded the exemption limit of Rs. 4.00 crores under Notification No. 8/2003-CE. The appellant claimed that if the cost of bought out items, freight, and excise duty were excluded, the value of clearances would fall within the exemption limit. However, the appellant failed to provide a Chartered Accountant's Certificate or quantification to support their claim, causing confusion for the Adjudicating authority. As a result, the Tribunal remanded the matter to the Adjudicating authority for reevaluation after the appellant produces the necessary data and certificates. The appellant was directed to deposit Rs. 5.00 lakh within eight weeks for compliance before the Adjudicating authority initiates the fresh proceedings. The Tribunal allowed the appeals by remanding the case for further consideration, keeping all issues open for the Adjudicating authority to review.

In conclusion, the Tribunal found that the appellant's failure to provide quantification or Chartered Accountant's certificate to support their claim led to a lack of clarity in the case. The matter was remanded to the Adjudicating authority for a fresh assessment after the appellant produces the required data and certificates. The Tribunal allowed the appeals by remanding the case, emphasizing the importance of providing substantiated evidence to support claims in excise duty matters.