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2024 (11) TMI 203 - AT - Central ExciseEligibility for exemption Notification No.10/2006-CE dated 01.03.2006 - SSI exemption - misclassification of goods - Parts of Kitchen/ table wares, Toilet Items, SS Box, Sigree/Tandoor and Brass Knobs - determination of ratio of the value of such items out of the total clearance value of the year 2012-13 - HELD THAT - It is clear that during 2014-2015 no such items were cleared by the Respondent. The Department has filed the appeal without application of mind, as the Order-in-Original clearly states the analogy which was adopted for quantifying the amount prior to 2011 as stated above. The Department, without reading the order, has filed the appeal in a vague and perverse manner which is liable to be dismissed. Furthermore, the Department has again failed to give or suggest any other method logically or evidence that the computation made by the commissioner was incorrect or arbitrary. He has adopted a reasonable method for computation. The issue in dispute in appeal is strictly restricted to the period prior to February, 2011 for which the Adjudicating Authority has used the 'analogy to calculate the value of duty leviable on the manufacturing of these 4/5 items prior to February, 2011. The demand in SCN for the same period is upto Rs.48,35,361/-. This demand of duty is below the monetary limit for filing the appeal before the Tribunal, hence this appeal itself is not maintainable. The amount stated in the appeal is incorrect as the dispute pertains to the period prior to 2011. In the Order-in-Original the Adjudicating Authority stated that these 4/5 items were eligible to SSI exemption for the period prior to 01.03.2011. However, this seems a typographical error as the SSI exemption was available till 31.03.2011. There are no infirmity in the impugned order - The appeal is dismissed.
Issues: Misclassification of goods, duty liability on 'bought out' goods, application of duty exemptions, invocation of extended period for demand, appeal validity based on monetary limit.
Misclassification of Goods: The appeal was against an Order-in-Original dated 15.01.2016 by the Commissioner of Customs, Central Excise & Service Tax, Hapur. The Respondent, a partnership firm, was engaged in manufacturing and trading of various household articles. The Department issued show cause notices (SCNs) alleging misclassification of goods and non-eligibility for duty exemptions. The Adjudicating Authority confirmed misclassification of 4/5 items and demanded duty for the period from April 2011 onwards. However, for the period prior to 2011, the value of misclassified items was determined based on the ratio of the value of such items out of the total clearance value of the year 2012-13. The appeal challenged this decision, but the Tribunal upheld the Order-in-Original's findings on misclassification. Duty Liability on 'Bought Out' Goods: The SCNs also alleged that certain goods purchased from unregistered dealers were falsely claimed as 'bought out' by the Respondent. The Respondent provided evidence, including a Chartered Engineer Certificate, to prove that these goods were not manufactured in their factory. The Adjudicating Authority concluded that the Department's allegation lacked credible evidence and dismissed the duty demand on these goods. The Tribunal upheld this finding, stating that the Department failed to substantiate its claim regarding the manufacturing of 'bought out' goods by the Respondent. Application of Duty Exemptions: The Respondent contended that the Department misinterpreted the Order-in-Original by applying the ratio used for quantifying the demand over the entire period from 2008-09 to 2014-15. However, the Tribunal noted that the Order-in-Original clearly specified the use of the ratio only for the period prior to 2011. The appeal was filed without proper consideration of the Order-in-Original, leading to a vague and incorrect conclusion. The Tribunal found no fault in the Commissioner's method of computation for duty leviable on the misclassified items. Invocation of Extended Period for Demand: The Adjudicating Authority upheld the invocation of an extended period for raising the demand. The Tribunal found no infirmity in this decision, indicating that the appeal did not challenge this aspect of the Order-in-Original. Appeal Validity Based on Monetary Limit: The appeal itself was deemed not maintainable as the demand of duty for the period prior to February 2011 was below the monetary limit for filing an appeal before the Tribunal. The Tribunal clarified that the dispute pertained strictly to the period before 2011, and the appeal did not present any valid grounds for challenging the Order-in-Original. Consequently, the appeal was dismissed, affirming the Commissioner's decision. This detailed analysis covers the various issues involved in the legal judgment, highlighting the key arguments, findings, and decisions made by the Adjudicating Authority and the Tribunal.
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