2019 (8) TMI 1364 - AT - Central Excise

SSI exemption - clubbing of clearances - stock transfer - whether the value of clearances of stock transfer from Delhi unit has also been added in the value of clearances of the Appellant? - HELD THAT - It is observed that a verification has got done during the original proceeding and the report dated 30.03.2016 negated about the value of stock transfer made by Delhi unit to have been added in the value of clearances of the Appellant relying where upon the proposed demand was confirmed - even Commissioner (Appeals) also sought another report from investigating authorities vide letter dated 23.02.2018 and 03.05.2018 and provided an opportunity to the Appellant to represent qua those investigations' reports. Details of total sales and duty liability for the respective years was provided by the appellant vide letter dated 15.02.2018. However, Commissioner (Appeals) was still of the opinion that no documents enabling necessary verifications were enclosed by the Appellant with the said letter. This information as provided by the Appellant got verified with respect to Annexure A to E of the show cause notice, the invoices were still found lacking to substantiate the claim of duplication of demand. However, the information of stock transfer from Delhi was not in dispute. The documents were still observed insufficient to verify as to whether the said stock transfer was not included in Bhiwadi sale for computation of duty. It is with these observations that the matter has been remanded for the aforesaid limited verification. The issue of show cause notice being time barred and that of imposition of penalty has been adjudicated against the Appellant. The submission about appellant being manufacturer as well as trader of the similar goods as his final goods, is a pure question of facts. The value of traded goods cannot be included in the assessable value of manufactured goods, no doubt is a legal principle, an issue of law but whether or not the appellant herein has any trading activity is purely a question of fact. Hence, the same cannot be taken before the Tribunal for a first time rather would have been raised at the first available opportunity. The matter needs reconsideration by the original adjudicating authority - appeal allowed by way of remand.

Summary

Issues:
Alleged wrongful availing of SSI benefit due to exceeding the exemption limit by clubbing clearances from multiple units.

Analysis:

1. The case involved the Appellant, engaged in manufacturing corrugated boxes, facing a show cause notice for allegedly wrongly availing the SSI benefit due to exceeding the exemption limit by clubbing clearances from its units at Bhiwadi and Delhi. The initial demand was confirmed but later appealed, leading to the current Tribunal hearing.

2. The Appellant argued that the value of goods from other manufacturers should not be considered in determining SSI exemption eligibility. They contended that the turnover of both units included traded goods purchased from other parties, which should be excluded. They cited VAT declarations and legal precedents to support their position.

3. The Departmental Representative countered, stating that the Appellant had not raised the trading goods issue earlier. They emphasized the need for further verification as some documents were lacking to substantiate the Appellant's claims. The Commissioner (Appeals) had remanded the matter for this purpose, which was deemed appropriate.

4. The Tribunal noted that the Appellant had two units at Bhiwadi and one at Delhi, with manufacturing activities at Bhiwadi only. The show cause notice had combined clearances from both Bhiwadi units, alleging exceeding the exemption limit. Despite some verifications, further reports and documents were required for clarity.

5. The Commissioner (Appeals) sought additional reports and documents for verification, but the Appellant's submissions were deemed insufficient. The issue of stock transfer from Delhi and inclusion in Bhiwadi sales for duty calculation remained unresolved, leading to the remand for necessary verifications.

6. The Appellant's new argument about trading activities was considered a question of fact, not law, and required lower adjudication levels for scrutiny. The Tribunal held that this fresh plea could not be entertained without proper verification at lower levels.

7. Consequently, the Tribunal upheld the Commissioner (Appeals)'s decision to remand the matter for reconsideration by the original adjudicating authority. The plea regarding trading activity was to be considered along with other issues like interest and penalty, requiring fresh adjudication.

8. The appeal was dismissed, directing the original adjudicating authority to reevaluate the case, including the trading activity plea, and decide on all pertinent issues afresh. The Tribunal found no infirmity in the remand order and instructed the Registry to facilitate the process accordingly.

In conclusion, the Tribunal's decision upheld the remand for further verification and reconsideration by the original adjudicating authority, emphasizing the need for proper scrutiny of all relevant issues, including the trading activity plea raised by the Appellant.