2018 (10) TMI 14 - AT - Central Excise

SSI exemption - clubbing of clearances - dummy units - it was alleged that their clearances in the name of one M/s Ashwini Enterprises are actually dummy clearances and the unit itself is a dummy one - Held that - The learned Commissioner has considered all the directions given by this Bench vide Final Order dated 09.07.2009 and has recorded his findings in detail. He also gave a detailed annexure justifying the demands confirmed by him with respect to the three show cause notices. There are no reason to interfere with this order of the Commissioner except to the extent that their denial of benefit of SSI exemption for the period 1994-95 is incorrect as even according to the order passed by the Commissioner, the total turnover of the appellant during the period 1993-94 was only ₹ 1,36,71,419/-. The appellant is entitled to the benefit of SSI exemption during the period 1994- 95 and the demand needs to be re-computed accordingly and if the demand in the show cause notice was in excess of this amount, the same needs to be reduced - appeal allowed by way of remand.

Summary

Issues:
- Denial of SSI exemption for specific years
- Job work valuation and deduction
- Trading activity deduction
- Clandestine removal and cum duty benefit
- Confirmation of demands, interest, and penalties
- Appeal against the order

Denial of SSI Exemption:
The appeals arose from an Order-in-Original concerning the denial of SSI exemption to the appellant for certain years. The Commissioner, in the impugned order, considered various aspects and findings, including the trading activity and job work valuation. The appellant contested the denial of SSI exemption for the years 1993-94 and 1994-95. The Commissioner had confirmed demands, interest, and penalties, leading to the appeals challenging these decisions.

Job Work Valuation and Deduction:
Regarding job work done for M/s Tasi Plastics, the appellant submitted a permission letter but failed to provide documentary evidence on the value of job work. The Commissioner, therefore, rejected the claimed deduction of &8377; 20,23,500 related to job work activity. The issue of job work valuation was pivotal in determining the duty liability and deductions applicable to the appellant.

Trading Activity Deduction:
The Commissioner acknowledged the trading activity undertaken by the appellant, deducing specific values from the demand based on documentary evidence provided. The deduction of trading activity values, along with job work valuation considerations, influenced the final computation of the duty liability and exemptions applicable to the appellant.

Clandestine Removal and Cum Duty Benefit:
The Commissioner addressed the cum duty benefit concerning clandestine removal, extending such benefits in the duty liability calculations. Additionally, the issue of SSI exemption, particularly for clearances up to a specified value, was examined and discussed in the context of the appellant's compliance and eligibility for such exemptions during the relevant periods.

Confirmation of Demands, Interest, and Penalties:
The impugned order confirmed demands under specific Central Excise Rules, accompanied by corresponding interest calculations and penalties imposed on the appellant. The Commissioner's decision on the demands, interest rates, and penalty amounts formed the basis of the appeals challenging the findings and seeking modifications.

Appeal Against the Order:
The appeals contested the denial of SSI exemption, job work valuation, trading activity deductions, and penalties imposed. The appellant sought a re-computation of duty considering SSI exemptions, reduction of penalties, and adjustments to the demands based on the findings and directions provided in the impugned order. The arguments presented by the appellant and the Departmental Representative were crucial in determining the outcome of the appeals.

In the final judgment, the Tribunal partially allowed the appeal, modifying the demands and penalties. The appellant's entitlement to SSI exemption for a specific period was recognized, leading to adjustments in the duty computation. Reductions in penalties and modifications in interest rates were also granted, reflecting a balanced consideration of the issues raised and the findings presented in the impugned order.