2013 (1) TMI 499 - AT - Central Excise

SSI Exemption Aggregate value of clearances - Assessee manufacture unprocessed cotton corduroy cloth - Under sub-heading 5801.21 of the Central Excise Tariff Two units both manufacturing the goods specified in SSI exemption Notification No. 8/2000-C.E. are owned by same person - Respondent unit was availing of SSI exemption No. 8/2000-C.E. during 2000-2001 the other unit M/s. H.B. Exports during the same financial year 2000-2001 was paying normal duty and availing Cenvat credit Penalty under Rule 173Q When same manufacturer owns more than one factory whether each unit would be individually be eligible for exemptions as specified in the Notification No. 8/2000-C.E. or the exemption specified in the Notification No. 8/2000-C.E. would be available only on the aggregate value of clearances of all the units owned by the same manufacturer Held that - When a manufacturer has more than one unit manufacturing the goods specified under Notification No. 8/2000-C.E. the clearances eligible for nil duty which are the first clearances upto Rs. 50, 00, 000/- from 1st April in the financial year would be the aggregate value of the clearances from all the units and not the first clearances in a financial year upto Rs. 50, 00, 000/- in each unit and similarly the concessional rate of 5% adv. prescribed for the next clearances of value of Rs. 50, 00, 000/- would be for the aggregate value of the clearances of all the units and not each units separately Therefore impugned order is not correct and same is liable to be set aside. In favour of revenue

Summary

Issues:
1. Clubbing of clearances for determining eligibility for concessional rate of duty under SSI exemption.
2. Interpretation of Notification No. 8/2000-C.E. regarding clearances from multiple factories owned by the same manufacturer.

Analysis:
1. The case involved a dispute regarding the clubbing of clearances for determining eligibility for concessional rate of duty under the SSI exemption. The appellant, a textile manufacturer, owned two units engaged in the manufacture of goods specified in the SSI exemption Notification No. 8/2000-C.E. The Revenue contended that the clearances of both units should be clubbed together to determine eligibility for the concessional rate of duty, leading to a show cause notice for short payment of duty. The Joint Commissioner upheld the duty demand and imposed penalties, which was challenged by the appellant. The Commissioner (Appeals) set aside the order, prompting the Revenue to file an appeal.

2. The main contention revolved around the interpretation of Clause 2(V) of Notification No. 8/2000-C.E., which stated that when a manufacturer clears specified goods from one or more factories, the exemptions shall apply to the aggregate value of clearances and not separately for each factory. The Tribunal analyzed this clause and held that for a manufacturer owning multiple units manufacturing goods under the SSI exemption, the clearances eligible for nil duty and concessional rates must be aggregated across all units. The Tribunal differentiated this case from previous judgments cited by both parties, emphasizing that the issue at hand was distinct. Consequently, the impugned order was set aside, restoring the order-in-original with a modification regarding the penalty imposed on the respondent.

In conclusion, the Tribunal's judgment clarified the application of Notification No. 8/2000-C.E. concerning the clubbing of clearances from multiple units owned by the same manufacturer for determining eligibility for concessional rates of duty under SSI exemption. The decision underscored the necessity to aggregate clearances across all units, rejecting the argument that each unit could individually avail exemptions.