2015 (2) TMI 519 - AT - Central Excise

SSI exemption notification no.9/2002-CE - whether the SSI exemption would be admissible to the appellant, when the declaration, though sent by the appellant under certificate of posting was not received either in the office of the Dy. Commissioner or in the office of the jurisdictional Range Superintendent - Held that - For the declaration, the appellant s unit would be eligible for SSI exemption. There is also no dispute that the appellant had sent the declaration under certificate of posting through postal authorities, Mayapuri, New Delhi - department does not dispute the appellant s claim regarding sending of declaration from Mayapuri Post Office under certificate of posting and also it is not disputed that otherwise, the appellant are eligible for exemption, the benefit of exemption cannot be denied just because the declaration was not received in the office of the Dy. Commissioner or in the Range Superintendent more so, when a copy of the declaration dated 28.08.2002 has been produced before the Asstt. Commissioner. In our view, the requirement of filing of the declaration has been substantially complied with and since as held by the lower authorities, the appellant are otherwise eligible for exemption, the benefit of exemption can not be denied just because the declaration was not received. The impugned order, therefore, is set aside - Decided in favour of assessee.

Summary

Issues:
Claim for SSI exemption under notification no.9/2002-CE based on filing of requisite declaration - Dispute regarding non-receipt of declaration by excise authorities - Jurisdictional Dy. Commissioner's order in favor of appellant - Revenue's review appeal before Commissioner (Appeals) - Commissioner's order-in-appeal confirming duty demand - Appeal against Commissioner's order.

Analysis:

The appellant, as manufacturers of food colors subject to central excise duty, sought SSI exemption for their Bhiwadi manufacturing unit under notification no.9/2002-CE by filing the required declaration. Despite the appellant's claim of dispatching the declaration under certificate of posting on 28.08.2002, the excise authorities alleged non-receipt of the declaration, leading to a dispute for the period from September 2002 to February 2003. Initially, the jurisdictional Dy. Commissioner dropped proceedings against the appellant, granting the exemption as the appellant was found otherwise eligible, emphasizing that substantial benefits cannot be denied for minor procedural lapses. The Dy. Commissioner acknowledged the appellant's entitlement to the exemption.

Subsequently, the Revenue filed a review appeal before the Commissioner (Appeals) challenging the Dy. Commissioner's decision. The Commissioner, in the order-in-appeal, reversed the Dy. Commissioner's ruling, upholding a duty demand of Rs. 36,768 against the appellant. The Commissioner deemed the filing of the declaration as a mandatory requirement for claiming the SSI exemption, highlighting the non-receipt of the declaration despite the appellant's assertion of sending it through post under UPC from Mayapuri post office. The Commissioner concluded that the exemption could not be availed due to the non-receipt of the declaration.

During the appeal hearing, the appellant's counsel argued that the necessary declaration for the Bhiwadi unit was dispatched from Mayapuri, New Delhi, and presented a copy of the certificate of posting to the Central Excise Authorities. The appellant contended that the exemption should not be denied solely on the grounds of non-receipt of the declaration, given their eligibility for the SSI exemption. The Departmental Representative defended the Commissioner's decision, emphasizing the mandatory nature of filing the declaration and the absence of its receipt by the excise authorities.

Upon reviewing the submissions and records, the appellate tribunal noted that the appellant's unit qualified for the SSI exemption except for the declaration issue. Acknowledging the dispatch of the declaration under certificate of posting from Mayapuri Post Office, the tribunal held that the exemption could not be denied based solely on non-receipt of the declaration by the excise authorities. The tribunal found that the filing requirement had been substantially met, and since the appellant was otherwise eligible for the exemption, the benefit could not be withheld due to non-receipt of the declaration. Consequently, the tribunal set aside the Commissioner's order, reinstating the Asstt. Commissioner's decision in favor of the appellant, allowing the appeal with consequential relief.