2017 (8) TMI 1212 - AT - Central Excise

SSI exemption - clubbing of clearances - N/N. 8/2003-CE, dated 01.03.2003 as amended by N/N. 30/2003-CE, dated 01.04.2003 - whether the clearances made from Pondicherry, Bangalore Units with MEDIMIX brand, cleared at nil rate of duty under Tariff rate will be excludible? - Held that - When the scheme of the SSI notification is considered as a whole, it is seen that branded goods which are not eligible for the benefit of the notification are to be cleared on payment of full duty without availing such exemption. Para 2 (vii) enforces a cap of ₹ 300 lakhs in the preceding financial year, for the aggregate value of clearances of all excisable goods. It is evident, by reading the notification as a whole that the limit of ₹ 300 lakhs is to include clearance of even exempted goods (subject to exclusion of Rule 3A). By concomitant reading of 3A(b) with para 4, the picture which emerges is that if branded goods are cleared on payment of duty without exemption, such value of clearances are not includible in para 2 (vii), but it should include value of all goods cleared under exemption or at nil rate of duty. To determine the aggregate value of all clearances for the year 2002-03, the value of clearances of MEDIMIX soap from Pondicherry and Bangalore Units at nil rate of duty will need to be included for the purposes of para 2 (vii) - appeal dismissed - decided against appellant.

Summary

Issues involved:
Interpretation of Notification No.8/2003-CE for SSI exemption eligibility based on aggregate value of clearances of excisable goods from multiple units.

Detailed Analysis:

1. Background of the Case:
The appellant, a manufacturer of toilet soaps under different brand names, availed SSI exemption under Notification No.8/2003-CE for the financial year 2003-04. The dispute arose when the department proposed to deny SSI benefit and demand duty due to the aggregate value of clearances exceeding the specified limit.

2. Interpretation of Notification:
The core issue revolved around whether clearances of branded goods from certain units, classified under different tariff rates, should be included in computing the aggregate value of clearances for SSI exemption eligibility.

3. Appellant's Argument:
The appellant contended that clearances of MEDIMIX soap from Pondicherry and Bangalore Units, bearing another person's brand name, cleared at a 'nil' rate of duty, should not be included as they were ineligible for SSI exemption.

4. Tribunal's Analysis:
The Tribunal examined the relevant provisions of Notification No.8/2003-CE, particularly para 3A(b) and para 4, to determine the scope of SSI exemption eligibility for branded goods not covered under the notification.

5. Legal Precedent:
The appellant cited a Supreme Court decision related to an earlier SSI notification, but the Tribunal found it inapplicable to the present case involving Notification No.8/2003-CE.

6. Conclusion:
After thorough analysis, the Tribunal upheld the impugned order, stating that the clearances of MEDIMIX soap from Pondicherry and Bangalore Units at 'nil' rate of duty must be included in computing the aggregate value for SSI exemption eligibility, rendering the appellant ineligible for the benefit in the following financial year for the Chennai Unit.

7. Final Decision:
The Tribunal dismissed the appeal, affirming the department's decision based on the interpretation of the notification and the inclusion of clearances of branded goods in determining SSI exemption eligibility.

This detailed analysis of the judgment highlights the key issues, arguments presented, legal interpretation, and the final decision rendered by the Tribunal.