2017 (4) TMI 382 - AT - Central Excise

SSI exemption - clubbing of clearances - case of Revenue is that the goods were cleared from appellant Paud, Pune unit on behalf of M/s. Industrial Product (Thane). Therefore, there is no doubt that the goods were manufactured by the appellant only, therefore, the duty of such goods was correctly demanded - Held that - the goods manufactured by M/s. Industrial Product (Thane) are not manufactured by the appellant. The specification and nature of goods in both factories are different - the goods alleged to have been cleared from appellant Fs factory on behalf of M/s. Industrial Product (Thane) manufactured by M/s. Industrial Product (Thane) only therefore, the value of the said clearances cannot be clubbed with the aggregate value of the appellant. If this is so, then the entire demand is not sustainable - appeal allowed - decided in favor of appellant.

Summary

Issues:
Manufacture and clearance of goods availing exemption, inclusion of value exceeding exemption limit, validity of show-cause notice, appeal against Order-in-Original, distinction in goods manufactured by different units, clubbing of clearance value.

Analysis:
The case involved a dispute where the appellant was alleged to have manufactured and cleared goods availing exemption but crossed the exemption limit due to the value of goods supplied on behalf of another entity. The department issued a show-cause notice demanding excise duty. The Order-in-Original confirming the demand was challenged in appeal before the Commissioner (Appeals) and subsequently before the Appellate Tribunal.

The appellant argued that the proceedings were based on a visit under doubt and that the goods supplied on behalf of the other entity were actually manufactured by that entity and not by the appellant. They presented evidence such as sample challans and industrial certificates to establish the independent manufacturing nature of the other entity's goods and the distinction in products manufactured by each unit.

On the other hand, the revenue authority contended that there was no dispute that the goods were cleared from the appellant's unit on behalf of the other entity, implying that the duty was rightfully demanded as the goods were manufactured by the appellant.

Upon careful consideration, the Appellate Tribunal found that the goods in question were actually manufactured by the other entity and not by the appellant. The tribunal noted that the goods were transferred from the other entity's unit to the appellant's premise for storage and subsequent clearance to the buyer. The specifications and nature of goods from both units were different, supported by industrial certificates. Therefore, the tribunal concluded that the clearance value of the other entity should not have been clubbed with the appellant's value, rendering the demand unsustainable.

In the final judgment, the Appellate Tribunal set aside the impugned order, allowing the appeal in favor of the appellant. The decision highlighted the incorrect clubbing of clearance values and the lack of merit in the demand raised by the revenue authorities.

This detailed analysis showcases the legal intricacies involved in the case, emphasizing the importance of substantiating claims with concrete evidence and maintaining the distinction between goods manufactured by different entities to determine excise duty liabilities accurately.