2018 (9) TMI 734 - AT - Central Excise

SSI Exemption - packing materials - exemption denied on labels/stickers falling under Chapter sub-heading No. 8421 1020/90 of the Central Excise Tariff Act, 1985 - N/N. 8/2003-CE dated 01/03/2003 - Held that - The Tribunal in the case of Purab Printers 2015 (10) TMI 1550 - CESTAT MUMBAI has extended the benefit of SSI exemption provided under N/N. 8/2003-CE dated 01/03/2003, holding that clause (e) under para 4 in the notification dated 01/03/2003 considers within its ambit labels, stickers for consideration of benefit of SSI exemption - Appeal allowed - decided in favor of appellant.

Summary

Issues: Denial of SSI exemption under Notification No. 8/2003-CE for labels/stickers, interpretation of the notification, applicability of the decision in Purab Printers case.

Analysis:
The judgment by the Appellate Tribunal CESTAT MUMBAI dealt with appeals against an order denying SSI exemption for labels/stickers falling under a specific chapter sub-heading of the Central Excise Tariff Act. The Commissioner of Central Excise (Appeals) upheld the demand, stating that the exemption only applies to packing materials, not labels/stickers. The appellant argued that a previous Tribunal decision in the Purab Printers case supported their claim for exemption under the same notification. The Revenue representative supported the findings of the impugned order.

Upon review, the Tribunal referred to the Purab Printers case where it was held that labels, stickers fall within the ambit of SSI exemption under the notification. The Tribunal emphasized the intention of the government to grant exemption to goods like labels, containers, etc., even if they carry a customer's brand name. The decision highlighted that the Circular supporting this view applies to cases where goods are not traded but supplied for further manufacture by the customer. The Tribunal rejected the Revenue's attempt to differentiate between stickers and labels, stating that all kinds of labels, stickers would be covered under the notification, including metal labels. The Tribunal concluded that the labels manufactured by the appellant were eligible for exemption under the notification, setting aside the impugned order.

In light of the legal position established by the Purab Printers case and the interpretation of the notification provided by the Tribunal, it was held that the impugned order denying the SSI exemption to the appellants was without merit. Consequently, the appeals were allowed in favor of the appellants, and the question of penalty did not arise in this case.