2016 (11) TMI 1208 - AT - Central Excise

SSI Exemption - Benefit of N/N. .9/2003-CE dt. 01.03.2003 - condition in notification to avail benefit - Held that - the appellant have availed exemption on the clearance of the un-branded goods and have paid full rate of duty on clearance of branded goods, we hold that the appellant have not violated the provisions of Notification No.9/2003-CE dt. 01.03.2003. Accordingly, we hold that the appellant is entitled to exemption benefit under the provisions of Notification No.9/2003-CE dt. 01.03.2003 - appeal dismissed - decided in favor of respondent-assessee.

Summary

Issues:
1. Interpretation of Notification No.9/2003-CE dt. 01.03.2003 regarding availing of duty exemption.
2. Validity of demand for differential duty and imposition of penalty.
3. Consideration of contravention of notification provisions and penalty imposition.
4. Alleged misuse of exemption and limitation of demand.

Analysis:
1. The case involved a dispute over the interpretation of Notification No.9/2003-CE dt. 01.03.2003 by the Revenue. The appellant had cleared goods at both concessional and normal rates of duty, leading to a demand for differential duty. The Revenue contended that the appellant failed to satisfy the conditions of the notification, specifically regarding the exercise of the exemption option before the first clearance. However, the respondent argued that they rightfully availed the benefit of the notification and did not exceed the exemption threshold. The Commissioner (Appeals) held that the appellant's omission in filing the required declaration did not bar them from availing the exemption, as there was no deliberate violation of the statute.

2. The dispute also centered around the validity of the demand for differential duty and the imposition of a penalty. The Original Adjudicating Authority confirmed the demand and imposed a penalty under Rule 25 of CER 2002. However, the Commissioner (Appeals) set aside the order, stating that there was no contravention of the notification provisions and no contumacious conduct or deliberate violation, leading to the allowance of the appeal and the removal of the penalty.

3. The Revenue, being dissatisfied with the decision, appealed to the Tribunal, alleging misuse of the exemption by the respondent. They argued that the Commissioner (Appeals) wrongly held the demand to be time-barred and erred in assessing the situation. The respondent's counsel maintained that the appellant had cleared branded goods at the full rate of duty while availing the exemption for non-branded goods as permitted under the notification.

4. After considering the arguments, the Tribunal found that the appellant had complied with the notification's provisions by availing the exemption on unbranded goods and paying the full duty on branded goods. Consequently, the Tribunal held that there was no violation of the notification and upheld the appellant's entitlement to the exemption benefit. The appeal by the Revenue was dismissed, and the respondent was granted any consequential benefits due.

This detailed analysis highlights the key legal issues, arguments presented by both parties, and the Tribunal's decision based on the interpretation of Notification No.9/2003-CE dt. 01.03.2003 and the application of relevant legal principles.