2017 (4) TMI 144 - AT - Central Excise

SSI Exemption - N/N. 08/2003-CE dated 01.03.2003 - Held that - Commissioner (Appeals) have rightly remanded to the adjudicating authority for a fresh decision considering the facts and additional evidence produced before him. In this view the matter, the impugned order in appeal directing the adjudicating authority to pass a fresh order as directed - appeal allowed by way of remand.

Summary

Issues involved:
1. Denial of SSI exemption under Notification No. 08/2003-CE.
2. Inclusion of value of bought out goods in assessable value of final products.
3. Correctness of duty rate computation.
4. Imposition of penalty under Rule 25 of the Central Excise Rules.

Analysis:

Issue 1: Denial of SSI exemption under Notification No. 08/2003-CE:
The Commissioner (Appeals) examined whether the P.D. Pumps manufactured by the party qualified for SSI exemption under Notification No. 08/2003-CE. The adjudicating authority had denied the exemption citing non-conformity to BIS standards. However, the party presented evidence including test reports, affidavits, and certificates to demonstrate compliance with BIS specifications. The Commissioner found the evidence substantial and criticized the adjudicating authority for not verifying with BIS. The Commissioner concluded that a re-examination was necessary, remanding the matter for a thorough review.

Issue 2: Inclusion of value of bought out goods in assessable value:
The second issue revolved around whether the value of bought out items like Electric Motors should be included in the assessable value of PD Pumps. Citing relevant case law, the Commissioner noted that Electric Motors were not integral parts of the pumps and therefore should not be considered in the assessable value. The Commissioner highlighted precedents where similar judgments were made, emphasizing that the adjudicating authority should have considered these rulings. The Commissioner upheld that the bought out items should not be included in the assessable value.

Issue 3: Correctness of duty rate computation:
The party raised concerns about the duty rate computation, pointing out discrepancies between the applicable rate and the rate used in the demand calculation. The Commissioner acknowledged this discrepancy and directed the original authority to recalculate the duty using the correct rates applicable during the relevant period. This issue required rectification to ensure accurate duty assessment.

Issue 4: Imposition of penalty under Rule 25 of the Central Excise Rules:
Regarding the penalty imposed under Rule 25 of the Central Excise Rules, the Commissioner noted that there was no evidence of suppression of facts or malafide intent by the party. Referring to Section 11AC of the Central Excise Act, the Commissioner concluded that penalty equivalent to the duty amount was not warranted. However, if the duty amount was to be recalculated, the penalty should be adjusted accordingly. The matter was remanded for the original authority to reconsider the penalty in light of any changes in duty amount.

In conclusion, the Commissioner upheld the decision of the Commissioner (Appeals) to remand the case for further review by the adjudicating authority, ensuring a comprehensive assessment of all evidence and legal precedents. The appeal was dismissed with directions for a fresh decision by the adjudicating authority.