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2018 (10) TMI 1532 - AT - Central ExciseSSI Exemption - dummy unit - Clubbing of clearances - Department made out a case that M/s. Ganesh Enterprises is owned by proprietor Shri Yogesh Chandradutt Dhariyal and therefore, M/s. Ganesh Enterprises is not entitled for SSI exemption - issue can be solved on the basis of classification of product itself. Held that - Reliance placed in the coordinate bench of this Tribunal in the case of Dhariyal Chemicals 2014 (8) TMI 81 - CESTAT AHMEDABAD . From the above decision, it is observed that the product of the appellant is identical to the product involved in above judgment of the Tribunal - As per the department itself, M/s. Ganesh Enterprises and M/s. Dhariyal Chemicals belong to one person i.e. Shri Yogesh Chandradutt Dhariyal. In the show cause notice also, it is admitted that the product of M/s. Dhariyal Chemicals and M/s. Ganesh Enterprises is identical. It is also observed that the ingredients used for manufacture of product by both the units are the same and resultant product is also the same. Therefore, in view of the judgment of this Tribunal in the case of Dhariyal Chemicals the product in the appellant s case is also clearly classifiable under Chapter heading 47 which attracts nil rate of duty. Therefore, there is no need to go to the question of limit of SSI exemption. Since, the department s proposal is to club the clearances of M/s. Dhariyal Chemicals and M/s. Ganesh Enterprises, but the clearances of M/s. Dhariyal Chemicals has been held as nil rated under Chapter heading 47, therefore, the same needs to be deducted from the aggregate value of M/s. Dhariyal Chemicals and M/s. Ganesh Enterprises. The yearly turn-over of M/s. Ganesh Enterprise is well within the limit of ₹ 1.5 Crores, therefore, even if it is assumed that the product of M/s. Ganesh Enterprises is dutiable, but when the products of M/s. Dhariyal Chemicals is not dutiable, the clearances of M/s. Ganesh Enterprise is eligible for SSI Exemption Notification No. 8/2003-Central Excise. Appeal allowed - decided in favor of appellant.
Issues:
1. Classification of goods under Chapter 47 for duty exemption. 2. Clubbing of SSI units for duty calculation. 3. Refund of amounts deposited during investigation. Classification of goods under Chapter 47 for duty exemption: The case involved a dispute regarding the classification of goods manufactured by M/s. Ganesh Enterprises under Chapter 47 of the Central Excise Tariff Act, 1985. The appellant argued that the product was identical to that of M/s. Dhariyal Chemicals, which had previously been classified under Chapter 47 in a Tribunal judgment. The Tribunal upheld the classification under Chapter 47, which attracted a nil rate of duty. The department's proposal to club the clearances of both entities was rejected since M/s. Dhariyal Chemicals' clearances were held as nil rated. Consequently, M/s. Ganesh Enterprises was eligible for SSI exemption under Notification No. 8/2003-CE. The Tribunal found that the classification issue was decisive, and as the judgment in the case of Dhariyal Chemicals had been accepted by the department, the classification of Cellulose powder under Chapter 47 was final, leading to duty exemption for M/s. Ganesh Enterprises. Clubbing of SSI units for duty calculation: The Tribunal determined that the clubbing of SSI units was unnecessary due to the classification under Chapter 47, which resulted in nil duty for M/s. Ganesh Enterprises. Even if the product of M/s. Ganesh Enterprises was considered dutiable, the fact that M/s. Dhariyal Chemicals' product was non-dutiable under Chapter 47 meant that M/s. Ganesh Enterprises' clearances fell within the SSI exemption limit. The yearly turnover of M/s. Ganesh Enterprise was below the threshold, further supporting their eligibility for the SSI exemption. The Tribunal's decision in the case of Dhariyal Chemicals, coupled with the identical nature of the products and ownership, rendered the clubbing of SSI units unnecessary for duty calculation purposes. Refund of amounts deposited during investigation: The issue of refund of amounts deposited during the investigation, which were appropriated in the order-in-original, was considered consequential to the main case. As the main appeal was allowed based on the classification under Chapter 47 and the subsequent duty exemption for M/s. Ganesh Enterprises, the refund of deposited amounts and their appropriation in the order-in-original were deemed to align with the decision to set-aside the impugned orders and allow the appeals. Therefore, the refund issue was addressed in conjunction with the primary classification and duty exemption matters. In conclusion, the Tribunal's judgment in this case primarily revolved around the classification of goods under Chapter 47, leading to duty exemption for M/s. Ganesh Enterprises. The clubbing of SSI units for duty calculation was deemed unnecessary due to the finality of the classification decision and the eligibility for SSI exemption. The issue of refund of deposited amounts was considered consequential to the main case, with the impugned orders being set-aside and the appeals allowed based on the classification under Chapter 47.
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