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2019 (10) TMI 637 - AT - Central ExciseSSI Exemption - denial on the sole ground that the goods manufactured by them bear the brand of LIC making the appellant as ineligible for the said SSI exemption - HELD THAT - The issue regarding the admissibility of SSI exemption benefit in the instant case is no longer res integra as has been decided by the co-ordinate benches of this Tribunal in series of decision incl. the decision in the case of Central Press Pvt Ltd vs. CCE, Kanpur 2018 (3) TMI 1540 - CESTAT ALLAHABAD for the very period in dispute. Time limitation - HELD THAT - In the impugned show cause notice dated 23.03.2009 no evidence of any positive action has been shown to prove that the assessee has wilfully not paid the demanded duty amount. The only allegation that has been made is that after the withdrawal of the exemption notification 10/2003-CE dated 01.03.2003, vide Notification no. 10/2006-CE dated 01.03.2006, the assessee became liable to pay duty from 01.03.2006 from which date the instant demand has been raised - appeal remanded to the original authority to quantify the duty for normal period i.e. 23-3-2006 to 22-3-2007 and to appropriate the same towards the amount already paid. In absence of any positive action brought on record and in view of the circumstances which prevailed for non- payment of duty, the larger period of limitation is not available to the department in the instant case and therefore, the demand raised beyond the normal period of limitation is unsustainable. The demand of duty, interest and penalty cannot sustain and are therefore set aside - appeal allowed - decided in favor of appellant.
Issues:
- Confirmation of central excise duty demand along with interest and penalty - Eligibility for SSI exemption benefits under Notification no. 8/2003-CE - Imposition of penalties on the company and the Director - Limitation period for demand of duty Analysis: 1. Confirmation of Central Excise Duty Demand: The appeals were filed against the Order-in-Original confirming a demand of central excise duty, interest, and penalty on the company and its Director. The duty liability arose after the withdrawal of an exemption notification, and the appellant paid the entire duty calculated by the department during the proceedings. The appellant argued that there was no wilful suppression to evade payment as the supply contract with LIC included clauses for reimbursement of duty by LIC. The Tribunal noted that the duty amount was reimbursed by LIC to the appellant, indicating no intention to evade payment. The Tribunal allowed the appeals, setting aside the demand of duty, interest, and penalty. 2. Eligibility for SSI Exemption Benefits: The issue of eligibility for SSI exemption benefits under Notification no. 8/2003-CE was a key point of contention. The appellant claimed entitlement to the benefit, citing previous judgments by the Tribunal supporting their position. The Tribunal referred to decisions by co-ordinate benches, including Central Press Pvt Ltd vs. CCE, which clarified that the appellant did not manufacture goods with the brand name of another person, thus qualifying for the exemption. The Tribunal upheld the appellant's argument and ruled in favor of granting the SSI exemption benefits. 3. Imposition of Penalties: The appellant contested the imposition of penalties on the company and the Director. The Tribunal considered the absence of wilful suppression and positive action to evade duty. Citing relevant case laws, the Tribunal concluded that the extended period could not be invoked due to lack of evidence of suppression. Therefore, the penalties imposed on the company and the Director were set aside. 4. Limitation Period for Demand of Duty: Regarding the limitation period for the demand of duty, the Tribunal analyzed the circumstances and actions of the appellant. It was observed that there was no positive act of suppression or collusion with intent to evade duty. The Tribunal held that the show cause notice was barred by limitation and restricted the demand to a specific period. The demand raised beyond the normal limitation period was deemed unsustainable, leading to the setting aside of the demand of duty, interest, and penalty. In conclusion, the Tribunal allowed the appeals, remanding the case to quantify the duty for the normal period and setting aside the demand of duty, interest, and penalty. The eligibility for SSI exemption benefits was upheld, and the penalties imposed on the company and the Director were revoked due to the absence of wilful suppression.
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