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2018 (8) TMI 1077 - AT - Central ExciseSSI Exemption - crossing of threshold exemption - denial on the ground that in the financial year 2007-2008, the appellant have crossed the threshold aggregate clearance value of ₹ 4 Crores - Held that - Merely by making payment of excise duty on 31.03.2007 it cannot be said that the goods on which such duty was paid where the clearances of on or before 31.03.2007. Undisputedly, the physically goods were cleared on or after 01.04.2007, therefore, these clearances should be taken in the year 2007-2008. Accordingly, the aggregate value needs to be calculated. However, the appellants heavily made a submission that there are certain bought out items which were cleared as such, the value of sale of those bought out goods should not be added in the aggregate value of clearance for the purpose of SSI exemption. The Adjudicating Authority though given finding in respect of the clearances of 9,32,665/- and 1,19,044/- towards export, but, no specific finding was given in respect of the goods, namely, Spray Drayer valued at ₹ 19,00,000/- cleared vide invoice No. 117 dated 03.03.2008. To ascertain whether this value represent the correct value, it is necessary to find that whether the spray dryer supplied by the appellant is a manufactured goods or it is clearance of bought out goods as such. This aspect needs verification by the adjudicating authority. Appeal allowed by remand.
Issues:
1. Eligibility for SSI Exemption Notification No. 8/2003-CE for the financial year 2008-2009. 2. Consideration of clearance value for the financial year 2007-2008. 3. Treatment of bought out parts in the aggregate clearance value. 4. Imposition of penalty under Section 11 AC. Eligibility for SSI Exemption (Issue 1): The appellants sought SSI Exemption for the financial year 2008-2009, which was denied by Revenue due to crossing the threshold aggregate clearance value of ?4 Crores in the financial year 2007-2008. The appellant's counsel argued that duty payment for a consignment of Spin Flash Dryer on 31.03.2007 should be considered in the previous year, reducing the value for 2007-2008 below the threshold. Additionally, they contended that certain bought out parts should be excluded from the aggregate value. The Tribunal noted that physical clearances after 01.04.2007 should be considered for the relevant year, and further investigation was required to determine if certain goods were manufactured or bought out. The penalty under Section 11 AC was set aside due to no suppression of facts. Consideration of Clearance Value (Issue 2): The Revenue argued that even though duty was paid before 31.03.2007, goods were physically cleared after 01.04.2007, impacting the aggregate value calculation for the financial year. The Tribunal agreed that physical clearances post 01.04.2007 should be accounted for in the relevant year, leading to the conclusion that the appellants exceeded the ?4 Crores threshold in 2007-2008. Treatment of Bought Out Parts (Issue 3): The appellant claimed that certain bought out parts should not be included in the aggregate value calculation. The Tribunal observed that specific verification was needed to determine if goods like the Spray Drayer were manufactured or bought out. The matter was remanded back to the adjudicating authority for further investigation on this aspect. Imposition of Penalty under Section 11 AC (Issue 4): Regarding the penalty under Section 11 AC, the Tribunal found that there was no suppression of facts as duty payment was duly declared in the invoice and monthly returns. Consequently, the penalty under Section 11 AC was set aside, along with the penalty on the Director. The demand for duty and interest on the appellant company was remanded back to the adjudicating authority for further proceedings. In conclusion, the Tribunal allowed the appeal filed by the appellant, setting aside penalties and remanding the matter for additional investigation and determination on specific aspects related to the eligibility for SSI Exemption and treatment of certain goods in the aggregate clearance value calculation.
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