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2008 (9) TMI 265 - AT - Central ExciseSSI exemption - computing aggregate value of clearances - In the earlier notification, namely 8/2002 dt. 1-3-2002, the clearance of exempted goods and nil rate of duty goods would not be taken into account. But in the Notification No. 8/2003 dt. 1.3.2003, such condition has been removed - appellant s argument that the deletion of the condition cannot be applied for year 2002-03 is devoid of any logic appellant contention that only the old notification has to be applied, is rejected in absence of proof that assessee approached department for clarification of any doubt, there was intention to evade duty so larger period invocable
Issues:
1. Interpretation of Notification No. 8/2003 for SSI exemption eligibility. 2. Calculation of aggregate value of clearances for the previous financial year. 3. Time-barred demand and applicability of longer period. 4. Bona fide belief and approach to the Department for clarification. 5. Levying of penalty under Section 11AC of the Act. Analysis: Issue 1: Interpretation of Notification No. 8/2003 The dispute revolves around whether the appellant is entitled to the benefit of Notification No. 8/2003 dated 1-3-2003. The condition in Para 2(vii) stipulates that if the aggregate value of clearances of all excisable goods exceeds Rs. 300 lakhs in the previous financial year, the exemption is not applicable. The appellant argued that the deletion of the condition regarding exempted and nil rate of duty goods cannot be applied for the year 2002-03. However, the Tribunal held that the Notification clearly states that the value of exempted and nil rate of duty goods should be included in calculating the aggregate value of clearances for the previous year. Therefore, the appellant's argument was rejected. Issue 2: Calculation of aggregate value of clearances The Tribunal emphasized that the appellant failed to include the value of exempted and nil rate of duty goods in calculating the aggregate value of clearances for the previous year, leading to the value exceeding Rs. 300 lakhs. The Tribunal found no merit in the appellant's arguments and distinguished the case laws cited by them, asserting that the Notification's method of computing clearances must be applied to the preceding year. Issue 3: Time-barred demand and longer period While a part of the demand fell within the one-year limitation period, the Tribunal noted that the appellants did not inform the Department about the changes in the Notification and failed to clarify their eligibility for the exemption. As a result, the longer period was deemed applicable. However, the Tribunal observed that paying the duty before the show cause notice exempts the appellants from penalty, following previous decisions and legal precedents. Issue 4: Bona fide belief and Department approach The Tribunal highlighted the appellants' lack of bona fide belief and failure to approach the Department for clarification regarding their eligibility for the exemption. This led to the conclusion that the longer period for demand was justified due to the appellants' inaction. Issue 5: Penalty under Section 11AC of the Act Considering the duty payment before the show cause notice, the Tribunal set aside the penalty imposed under Section 11AC but upheld the payment of interest until the date of payment. The decision was based on previous Tribunal rulings and legal precedents supporting penalty exemption when duty is paid before the issuance of a show cause notice. In conclusion, the appeal was partially allowed, with the penalty under Section 11AC being set aside, but the payment of interest up to the date of payment being upheld. The Tribunal's decision was pronounced on 9-9-2008.
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