2017 (1) TMI 759 - AT - Central Excise

SSI exemption - use of brand name of others - whether SSI exemption availed is correct in view of the fact that the appellants were located in the rural area? - Held that - the appellant s unit is located in the Industrial area, which is located in the Gram Sabha as per the Revenue records duly certified by the Revenue Authority of the State Government and, accordingly, I hold that the appellant s unit is entitled to exemption under N/N.8/2003-CE in terms of Clause 4(C) read with Clause 5H of N/N.8/2003-CE - Pre- deposit made during pendency of the appeal, shall be refunded to the appellant within a period of 60 days with interest - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Entitlement to exemption under Notification No.8/2003-CE for manufacturing biscuits under another brand name in a rural area.

Analysis:
The appeal raised the issue of whether the appellant, a biscuit manufacturer under another brand name, is eligible for exemption under Notification No.8/2003-CE as they claimed to be located in a rural area. The appellant had availed full exemption up to a certain value and paid duty on the excess amount. However, it was discovered that they had manufactured and cleared biscuits under a brand name belonging to another entity. The appellant admitted to producing the biscuits under a license agreement with the brand owner and using their goodwill for sales. The appellant's quarterly returns did not initially reflect the production and clearance of the other brand's biscuits, but later, they provided detailed information about the quantities and values of such biscuits produced and cleared.

The brand in question, "Bhagwati," belonged to a different entity, while the brand "Bisca" belonged to the appellant themselves. The Tribunal noted that the exemption under the relevant notification did not seem to apply to the clearance of biscuits under another person's brand, such as "Bhagwati." The appellant had manufactured and cleared both their own brand and the other brand during different periods, with discrepancies in the information provided in their quarterly returns.

The show-cause notice led to a demand being confirmed against the appellant, rejecting their SSI exemption claim and imposing a penalty. The Commissioner (Appeal) upheld the decision, stating that the appellant's unit was in an industrial area, not qualifying for the rural area exemption. The appellant argued that the industrial area was within the Gram Sabha, as per official records, and thus should not be excluded from the SSI exemption. They presented relevant documentation to support their location claim.

After considering the arguments, the Tribunal found that the appellant's unit was indeed situated in an industrial area within the Gram Sabha, as verified by state revenue authorities. Consequently, the Tribunal held that the appellant was entitled to the exemption under Notification No.8/2003-CE based on the clauses mentioned in the notification. The appeal was allowed, the impugned order was set aside, and the appellant was to receive consequential benefits along with a refund of the pre-deposit made during the appeal period with interest.

In conclusion, the Tribunal's decision highlighted the importance of the specific location of the appellant's unit in determining their eligibility for the SSI exemption under the relevant notification, ultimately ruling in favor of the appellant based on the location verification provided.