2014 (2) TMI 631 - AT - Central Excise

Duty demand - Exemption under notification No.8/2003-CE dated 01/03/2003 - Imposition of equivalent amount of penalty - Held that - Notification No.10/2013-CE(NT) dated 02/08/2013 issued under Section 11C of the Central Excise Act, 1944, extends the benefit of small scale exemption under notification No. 8/2003-CE dated 01/03/2003 to plastic containers and plastic bottles meant for use as packing material by the person whose brand name such goods bear during the period 16/06/2003 to 26/02/2010. Therefore, the appellant is rightly entitled to the benefit of the said exemption. Therefore, the impugned order is not sustainable in law - Decided in favour of assessee.

Summary

Issues:
- Eligibility for small scale exemption under notification No.8/2003-CE dated 01/03/2003 for a manufacturer of plastic bottles printing customer's brand names on the bottles.
- Interpretation of Notification No.10/2013-CE (NT) dated 02/08/2013 under Section 11C of the Central Excise Act, 1944 regarding the benefit of SSI exemption for plastic containers/bottles affixed with the brand name of the user of the goods.

Analysis:
The appeal before the Appellate Tribunal CESTAT MUMBAI involved a dispute regarding the eligibility of a manufacturer of plastic bottles, M/s. Kabeer Plastic Industries, Mumbai, for small scale exemption under notification No.8/2003-CE dated 01/03/2003. The department contended that since the bottles bore the brand name of another person, the appellant was not entitled to the exemption and was liable to pay duty. A duty demand, interest, and penalty were imposed for the period 2004-05 to 2008-09. The appellant challenged this decision, arguing that Notification No.10/2013-CE (NT) dated 02/08/2013 extended the benefit of the exemption even when the bottles were affixed with the brand name of the user of the goods during a specific period. The appellant sought relief based on this notification.

Upon considering the submissions, the Tribunal examined Notification No.10/2013-CE(NT) dated 02/08/2013 issued under Section 11C of the Central Excise Act, 1944. This notification extended the benefit of small scale exemption under notification No. 8/2003-CE dated 01/03/2003 to plastic containers and bottles bearing the brand name of the user during a defined period. The Tribunal concluded that the appellant was rightfully entitled to the exemption as per the provisions of the notification. Consequently, the impugned order was deemed unsustainable in law. Therefore, the appeal was allowed in favor of the appellant, granting them the benefit of the exemption and setting aside the duty demand, interest, and penalty imposed by the department for the specified period. The decision highlighted the significance of the specific notification in determining the eligibility for the exemption, ultimately leading to a favorable outcome for the appellant.