2017 (2) TMI 821 - AT - Central Excise

Denial of SSI exemption - Due to failure in filing the declaration the exemption was denied - Held that - we are of the considered view that merely for non-filing of option letter to the department the SSI exemption Notification No. 9/2003-CE cannot be denied - Appeal allowed - decided in favor of the assessee.

Summary

Issues:
- Availing SSI exemption without filing mandatory option
- Denial of exemption by lower authority
- Upholding of Order-in-Original by Ld. Commissioner (Appeals)
- Appeal filed by the appellants

Analysis:

The case involved the appellants who availed SSI exemption under notification No. 9/2003-CE but were denied the exemption by the lower authority for not exercising the mandatory option as required by the notification. The Ld. Commissioner (Appeals) upheld the Order-in-Original, leading the appellants to appeal before the Appellate Tribunal.

During the proceedings, none appeared on behalf of the appellants. The Ld. Assistant Commissioner (A.R.) representing the Revenue reiterated that as per a Supreme Court judgment, filing a declaration is a mandatory condition for availing the exemption notification.

The Tribunal observed that the sole reason for denying the exemption was the failure to opt for it in writing, even though the appellants met all other legal requirements for the SSI exemption. The Tribunal noted that the necessary particulars required for the option were already available with the department, such as the manufacturer's details and factory locations. It was emphasized that the non-filing of the option in writing was a procedural lapse and should not lead to the denial of substantial benefits under the SSI exemption.

Referring to a previous decision by the Tribunal in a similar case, it was highlighted that the benefit of the notification cannot be denied solely for a procedural omission of not filing the prescribed declaration. The Tribunal distinguished a Supreme Court judgment cited by the Revenue, stating that the facts of that case were different and that on the same issue, the Tribunal had previously allowed the exemption under notification No. 9/2003-CE.

Ultimately, the Tribunal concluded that the denial of the SSI exemption based on the non-filing of the option in writing was unjustified. The impugned order was set aside, and the appeals of the appellants were allowed, granting them the benefit of the exemption under notification No. 9/2003-CE.

The judgment was pronounced in court on 23/01/2017.