2024 (2) TMI 430 - AT - Central Excise

SSI Exemption - Determination of turnover / value of first clarence - Eligibility for concessional rate of duty as provided in the Notification 9/2000 - whether the value of clearances made by paying duty at the normal rate is to be included or not for the purpose of computing the first value of clearances of 100 lakhs while allowing the benefit of concessional rate of duty as per Notification 9/2000, during a financial year? - HELD THAT - The Appellant is a SSI unit availed the benefit of the Notification 9/2000, which prescribes concessional rate of duty based on a slab rate basis upto the first clearances value of Rs.100 lakhs, with Cenvat facility. This Notification is not automatic for a SSI Unit and the SSI Unit has to exercise the option to avail this exemption. Once exercised at any time during a financial year, the option could not be withdrawn during the remaining part of the financial year. It is observed that during the Financial Year 2000-01, the Appellant has opted for the benefit of this Notification and never opted out of the Notification during the Financial Year 2000-01. Thus, they would be entitled for the benefit of concessional rate of duty till they cross the value of clearances upto Rs.100 lakhs, during the Financial Year 2000-01. This value is to be computed by taking into account only the value of goods wherein the benefit of concessional rate has been availed. The demand of duty along with interest confirmed in the impugned order is not sustainable. Since the demand of duty is not sustainable, the question of imposing penalty does not arise - the impugned order set aside - appeal allowed.

Summary

Issues involved:
The appeal against the Order-in-Appeal confirming Central Excise duty demand, interest, and penalty.

Details of the Judgment:

Issue 1: Applicability of Notification 9/2000
The Appellant, a small scale manufacturer, availed the benefit of Notification 9/2000 for concessional duty rates. The dispute arose when the department alleged that the Appellant was not eligible for the concessional rate of duty as they cleared goods on payment of normal excise duty for select organizations. The Appellant argued that they never opted out of the Notification during the Financial Year 2000-01 and denying the exemption would be withdrawing their option mid-way. The Tribunal observed that the Appellant opted for the benefit of the Notification and never opted out during the Financial Year. The value of clearances on payment of full duty without availing the benefit of the Notification should not be included in computing the value of clearances up to Rs. 100 lakhs. Citing a similar case, the Tribunal held that there is no bar in paying normal duty for some clearances while availing the benefit of the exemption Notification.

Issue 2: Calculation of Clearances Value
The central issue was whether the value of clearances made by paying duty at the normal rate should be included for computing the first value of clearances of 100 lakhs while allowing the benefit of concessional duty rates as per Notification 9/2000. The Tribunal clarified that only the value of goods where the concessional rate was availed should be considered for computing the value of clearances up to Rs. 100 lakhs. Goods cleared on payment of normal duty without availing the benefit of the Notification should be excluded from this calculation.

Decision:
The Tribunal set aside the impugned order and allowed the appeal filed by the Appellant, as the demand of duty along with interest was deemed unsustainable. Since the duty demand was not sustainable, the question of imposing a penalty did not arise.

This summary captures the key issues, arguments, and the Tribunal's decision in the legal judgment.