2020 (1) TMI 536 - AT - Central Excise

SSI exemption - valuation - allegation that break-up submitted by the Respondent did not reveal any separation between different jobs and loose furniture for the relevant period - HELD THAT - The Respondent manufactures furniture, which are leviable to Central Excise duty and other non-excisable goods; fixed wood work (interior decoration), export, trading of imported goods etc. It appears from the impugned order that the demand has been made without segregation of the dutiable and non-dutiable invoices. On the other hand, the Respondent had produced the statement of clearance of job-work items, dutiable items within exempted limits. The adjudicating authority has observed that the report of Anti-Evasion Wing does not dispute this inasmuch as they have not come with a segregated calculation of duty liability. It appears that the Respondent had produced the Chartered Accountant Certificates of each year, certifying that it was prepared on the basis of the books of accounts, records and documents produced for their verification - the Chartered Accountant Certificate cannot be brushed aside, unless there is any proof of material in support of the contention made by the Revenue. The other aspect of this matter is that the Respondent had claimed S.S.I. Exemption and the accounts were maintained for other purposes like Sales Tax, Service Tax etc., which were audited by the Chartered Accountant as per the statutory provisions. Hence, there is no force in the grounds of appeal filed by the Revenue. There are no substance in the appeal filed by the Revenue - appeal dismissed - decided against Revenue.

Summary

Issues:
- Challenge to dropping of proceedings by the Commissioner of Central Excise
- Alleged evasion of Central Excise duty by the Respondent
- Dispute regarding segregation of job-work materials and excisable goods
- Reliability of Chartered Accountant Certificate
- Claim of S.S.I. Exemption by the Respondent

Challenge to Dropping of Proceedings:
The Revenue challenged the dropping of proceedings by the Commissioner of Central Excise. The show cause notice dated 15.01.2009 proposed a demand for Central Excise duty against the Respondent. The impugned order observed that the show cause notice was not sustainable and further proceedings were dropped. The Revenue appealed this decision before the Tribunal.

Alleged Evasion of Central Excise Duty:
The Respondent, engaged in furniture manufacturing, was accused of evading Central Excise duty by not considering the value of certain furniture items while availing the S.S.I. Exemption. The Central Excise officers visited the factory and initiated show cause proceedings demanding duty payment for the period 2003-04 to 2007-08. The impugned order dropped the proceedings, leading to the Revenue's appeal.

Dispute Regarding Segregation of Job-Work Materials:
The Revenue contended that the Respondent did not segregate job-work materials and excisable goods in their submissions, leading to an incorrect calculation of duty liability. The Respondent, however, provided documents supporting their claims, including Chartered Accountant Certificates. The Tribunal noted the absence of evidence to rebut the certificates and upheld their reliability.

Reliability of Chartered Accountant Certificate:
The Respondent's Chartered Accountant Certificates were crucial in certifying the accuracy of submitted documents and calculations. The Tribunal emphasized that unless the Revenue could provide contrary evidence, the certificates were conclusive. Referring to precedent cases, the Tribunal highlighted the importance of such certificates in the absence of contradictory material.

Claim of S.S.I. Exemption:
The Respondent had claimed the benefit of S.S.I. Exemption and maintained accounts audited by a Chartered Accountant for various purposes. The Tribunal noted that the Respondent's compliance with statutory provisions and the lack of merit in the Revenue's grounds of appeal. Citing a decision by the Hon'ble Gujarat High Court, the Tribunal dismissed the Revenue's appeal and upheld the impugned order.

In conclusion, the Tribunal dismissed the Revenue's appeal, upholding the impugned order dropping the proceedings initiated by the Commissioner of Central Excise. The decision was based on the reliability of the Chartered Accountant Certificates, lack of segregation issues in the Respondent's submissions, and the Respondent's compliance with S.S.I. Exemption requirements and statutory provisions.