2001 (1) TMI 85 - SC - Central Excise

Summary

Issues involved: Determination of small-scale industry status for excise duty levy based on aggregate value of goods cleared, consideration of printed cartons in assessing eligibility for exemption notification.

In this case, the respondent manufactured playing cards and printed cartons at a printing press, falling under different tariff items. The question was whether the respondent could be considered a small-scale industry for excise duty levy on playing cards, considering the value of printed cartons, even though excise duty on printed cartons was exempted by Notification No. 89/79. The excise authorities concluded that the respondent exceeded the turnover threshold of Rs. 20 lakhs by aggregating the value of playing cards and printed cartons cleared. The respondent challenged this decision through a writ petition, which was initially ruled in their favor by the Single Judge and Division Bench based on the interpretation of Notification No. 80/80 exempting excise duty on playing cards below Rs. 20 lakhs, excluding printed cartons' value. However, the Supreme Court overturned these judgments.

The notification dated 19-6-1980 exempted specified goods from excise duty subject to conditions, including a threshold limit on aggregate clearances in the preceding financial year. The Court noted that the notification did not apply to a manufacturer if the aggregate value of clearances of specified goods exceeded Rs. 20 lakhs, irrespective of the duty rate. In the previous year, clearances for playing cards were Rs. 14,11,467.35 and for printed cartons were Rs. 10,93,846.04, with no excise duty on printed cartons due to an exemption.

The Court clarified that the notification denied benefits to manufacturers exceeding Rs. 20 lakhs for goods under multiple tariff items. Even though printed cartons were not specified goods under the notification, both playing cards and printed cartons were excisable goods. The Court emphasized that the NIL duty rate on printed cartons did not make them non-excisable goods. Therefore, the excise authorities were correct in aggregating the turnover of both items to determine the respondent's small-scale industry status, making them ineligible for the notification's benefit on playing cards. Consequently, the appeal was allowed, and the judgments of the Single Judge and Division Bench were set aside, with no costs awarded.