2008 (8) TMI 41 - SC - Central Excise

SSI exemption clubbing clearances - both the units had common Directors since accounts of both the units are managed separately - they have separate capital, premises, machinery and labour and carrying out separate operations clearances cannot be clubbed held that packing charges could not be included in the A.V. as the material for the same had been supplied by the buyers to the assessee free of cost revenue appeal dismissed tribunal s finding is justified

Summary

Issues:
1. Clubbing of units for SSI exemption
2. Inclusion of packing charges in the assessable value

Clubbing of units for SSI exemption:
The case involved two small scale industries granted SSI exemption under specific notifications. The assessing officer issued show cause notices to explain why the clearance of both units should not be clubbed together due to common directors and management. The Commissioner (Appeals) partially accepted the appeal, ruling that both units should be clubbed for SSI exemption purposes. The Tribunal, however, overturned this decision, noting that the units operated separately with distinct accounts, capital, premises, machinery, and labor. The Supreme Court upheld the Tribunal's findings as factual and confirmed that the units were distinct entities eligible for separate treatment.

Inclusion of packing charges in the assessable value:
Regarding the inclusion of packing charges in the assessable value, the Commissioner (Appeals) had ruled in favor of the assessee, stating that packing charges could not be included as the material was provided by buyers at no cost. The Tribunal supported this decision, citing a previous Supreme Court judgment in the case of Hindustan Polymers vs. CCE. The Supreme Court, after reviewing the relevant judgments, agreed with the Tribunal's interpretation and upheld that the point regarding packing charges was settled against the revenue and in favor of the assessee. Consequently, the appeals were dismissed, with each party bearing their own costs.