2006 (4) TMI 19 - AT - Central Excise

Central Excise SSI Exemption (1) Appellant paid duty under the impression that exemption not eligible as branded product manufactured (2) Option to pay duty once exercised cannot be withdrawn during the same financial year (3) Genuine mistake (4) Classification list

Summary

Issues:
Classification of duty payment under Notification No. 1/93, applicability of SSI exemption, right to switch duty rates, interpretation of Notification No. 59/94, differential duty demand, availability of slab exemption for SSI units, mistake in payment of duty, option for exemption availing.

Analysis:
The case involves a challenge by M/s. Syndet India (Pvt.) Ltd., a manufacturer of Bullet brand Detergent Cake, against the order of the Commissioner (Appeals), Central Excise, Kanpur. The appellants initially filed a Classification List (14/94-95) and paid duty at a specific rate. Later, they revised the list (33/94-95) to avail SSI exemption under Notification No. 1/93, paying duty at a concessional rate. A show cause notice was issued, alleging improper switching of duty rates within the same financial year. The Assistant Commissioner and the Commissioner (Appeals) upheld the demand for differential duty based on the interpretation of Notification No. 59/94.

The appellants argued that they rectified the duty payment mistake by filing a revised classification list to avail slab exemption for their brand 'Bullet'. They contended that no option to pay duty at tariff rate was mentioned in the relevant notification. The Tribunal noted that the mistake seemed genuine, considering the close timeline of events and the appellants' eligibility for SSI exemption. The authorities did not dispute the quantum of clearance or the eligibility for exemption. The Tribunal also considered the appellants' claim of not making an option for exemption availing, which was not refuted by the respondents.

The Tribunal referred to a previous case where late notification awareness was accepted as a valid reason for claiming benefits. The learned SDR reiterated the lower authorities' conclusions, citing a case where once an assessee opted out of an exemption, subsequent availing was not allowed. However, the Tribunal found the appellants' case to be a genuine mistake and ruled in their favor, setting aside the impugned order and allowing the appeal. The decision was pronounced on 13-4-2006.