2005 (1) TMI 171 - AT - Central Excise

Summary

Issues:
1. Denial of SSI exemption benefit due to exceeding investment limit and clubbing of investment in plant and machinery.
2. Clubbing the value of clearances of two companies.
3. Duty payment on scrap generated in the factory.
4. Denial of higher notional credit under Rule 57B.
5. Removal of scrap, aluminium alloy ingots, and profiles.
6. Imposition of penalties under Rule 209A.

Issue 1: The Commissioner confirmed demands based on the denial of SSI exemption due to exceeding the investment limit and clubbing of investment in plant and machinery. However, the Tribunal found that M/s. Aaditya Aluminium Pvt. Ltd. and M/s. Aspi Casting Pvt. Ltd. were separate entities, and the denial of SSI benefit on the ground of investment exceeding Rs. 35.00 lakhs was not sustainable. The Tribunal referred to previous orders and set aside the demand of Rs. 21,71,816.73.

Issue 2: The demand of Rs. 20,39,677.48 was related to clubbing the value of clearances of both companies. The Tribunal held that limited companies, whether public or private, are to be treated as separate entities. Citing relevant circulars, the Tribunal set aside this demand, stating that each limited company, as a manufacturer, is entitled to a separate exemption limit.

Issue 3: Regarding the demand of Rs. 2,95,480.19 for duty payment on scrap generated in the factory, the Tribunal accepted the contention that the value of scrap cleared under Rule 57F(2) was not includible in computing the aggregate value of clearances. Referring to a Larger Bench decision, the Tribunal set aside this demand.

Issue 4: The demand of Rs. 37,312.79 was related to the denial of higher notional credit under Rule 57B. The Tribunal found that the companies were independent SSI units, and therefore, the higher notional credit availed by M/s. Aaditya Aluminium Pvt. Ltd. could not be faulted with. Consequently, this demand was set aside.

Issue 5: The demand of Rs. 4,71,982.20 on the removal of scrap, aluminium alloy ingots, and profiles was not contested by the appellants. The Tribunal upheld this demand.

Issue 6: Penalties amounting to Rs. 45.00 lakhs were imposed on the companies and the director under Rule 209A. The Tribunal reduced the penalty on M/s. Aaditya Aluminium Pvt. Ltd. to Rs. 1.00 lakh and set aside the penalties on M/s. Aspi Casting Pvt. Ltd. and the director, based on the findings on the other issues.

In conclusion, the Tribunal partly allowed the appeal of M/s. Aaditya Aluminium Pvt. Ltd., while fully allowing the appeals of the other two appellants, setting aside most demands and adjusting penalties accordingly.