2010 (4) TMI 373 - HC - Central Excise

SSI Exemption-Notification No. 9/2000-C.E., dated 1-3-2000- during the course of checking of record by the Revenue, it was observed that the appellants had availed the benefit of SSI exemption in terms of Notification No. 9/2000-C.E., dated 1-3-2000 and paid duty accordingly. It was also observed that the value of the goods cleared by the party during the preceding financial year i.e. 1999-2000 was more than permissible limit of Rs. 300 lacs. As per Notification No. 9/2000-C.E., dated 1-3-2000, the SSI exemption was available only to the units having clearances not exceeding Rs. 300 lacs in the preceding financial year. Held that- language in notification clear and not indicating that clearance under section 3A not includible for calculation of aggregate value of clearance. SSI exemption not admissible.

Summary

Issues:
1. Interpretation of Notification No. 9/2000-C.E., dated 1-3-2000 regarding SSI exemption eligibility.
2. Whether goods cleared under Section 3-A should be included in determining the aggregate value for SSI exemption.

Issue 1: Interpretation of Notification No. 9/2000-C.E., dated 1-3-2000 regarding SSI exemption eligibility:
The case involved a hot re-rolling mill of non-alloy steel claiming SSI exemption under Notification No. 9/2000-C.E. The Revenue observed that the appellant exceeded the permissible limit of Rs. 300 lacs in the preceding financial year. The appellant argued that clearances under the Compounded Levy Scheme (Section 3-A) should be excluded while determining eligibility. The Revenue contended that an amendment added clauses to include clearances under Section 3-A in the aggregate value for SSI exemption calculation. The court examined the notification's language and intent, emphasizing that the exemption aims to benefit Small Scale Units specifically. The court held that clearances under Section 3-A should be included in the aggregate value calculation, rejecting the appellant's argument.

Issue 2: Whether goods cleared under Section 3-A should be included in determining the aggregate value for SSI exemption:
The court analyzed the Notification and previous judgments to determine if goods cleared under Section 3-A should be considered for SSI exemption eligibility. It was noted that the notification excluded specific clearances but did not mention exclusions for goods cleared under Section 3-A. Citing a previous judgment, the court emphasized that clearances under Section 3-A should be included in calculating the aggregate value for SSI exemption. The court dismissed the appellant's reliance on Trade Notice No. 28/CE/94, stating that dutiable goods prior to 1-4-2000 should be included in calculating eligibility limits. Ultimately, the court ruled in favor of the Revenue, dismissing the appeals due to the incorrect availing of SSI exemption by the appellant.

This judgment clarifies the interpretation of Notification No. 9/2000-C.E. and establishes that goods cleared under Section 3-A must be included in determining the aggregate value for SSI exemption eligibility, emphasizing the legislative intent to benefit Small Scale Units specifically.