2018 (7) TMI 765 - AT - Central Excise

SSI Exemption - aggregate value of clearances for the purpose of SSI exemption limit - addition of clearances of EOU Unit - Held that - The export clearances other than made to Nepal and Bhutan, cannot be added to the value of home consumption clearances, for the purposes for determining aggregate value of clearance - It is not disputed that, the Hosur unit of the appellant was an EOU and thus that units clearances then cannot be added to the appellant s Manali unit for such purposes. Extended period of limitation - Held that - The ground invoked in the SCN for invoking the extended period of limitation is not at all convincing. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
- Aggregation of clearances for determining eligibility for SSI exemption under Notification No. 8/2003-CE.
- Applicability of the extended period of limitation.
- Treatment of units as individual factories for exemption purposes.

Analysis:

1. Aggregation of Clearances:
The case involved the aggregation of clearances for determining eligibility for the Small Scale Industries (SSI) exemption under Notification No. 8/2003-CE. The appellant, engaged in the manufacture of polished granite slabs/tiles, had two units, and the department contended that the value of clearances from both units exceeded the prescribed limit. The Tribunal analyzed the relevant provisions of the notification and held that for determining the aggregate value of clearances, export clearances to countries other than Nepal and Bhutan should not be added to the value of home consumption clearances. Since the Hosur unit was a 100% Export Oriented Unit (EOU), its clearances could not be aggregated with the Manali unit's clearances. Consequently, the Tribunal concluded that the impugned order could not be sustained on this ground and set it aside.

2. Extended Period of Limitation:
The appellant raised the issue of the proceedings being time-barred, arguing that the ground for invoking the extended period of limitation was not convincing. The Tribunal examined the grounds for invoking the extended period of limitation as per the show cause notice (SCN) and found them lacking merit. Notably, the fact of the existence of the appellant's units was not brought to the notice of the department, which was the sole ground for invoking the extended period. Based on this analysis, the Tribunal held that the impugned order could not stand on this ground as well, leading to the decision to set it aside.

3. Treatment of Units for Exemption Purposes:
The appellant contended that each unit should be treated as an individual factory for exemption purposes, citing a relevant case law. The Tribunal considered this argument in light of the nature of the units and the provisions of the exemption notification. While the Tribunal did not delve deeply into this aspect in the final decision, the treatment of units as separate entities for exemption eligibility was a crucial argument made during the proceedings.

In conclusion, the Tribunal allowed the appeal, setting aside the impugned order and providing consequential relief as per the law. The judgment clarified the principles regarding the aggregation of clearances, the application of the extended period of limitation, and the treatment of units for exemption purposes, providing a comprehensive analysis of the issues raised during the case.