2019 (5) TMI 578 - AT - Central Excise

SSI Exemption - exemption was denied on the ground that the appellant have not filed the declaration as required under notification no. 22/98-C.E. (N.T.) dated 04.06.1998 whereby exemption is granted from obtaining the registration - HELD THAT - This notification grants exemption to an assessee from obtaining the registration if the goods manufactured is cleared under exemption or goods attract nil rate of duty. As regard Notification no. 08/2000-CE, nowhere the condition is provided that if the declaration under notification 22/98 is not filed, exempted under 08/2000 is not available. Therefore, the notification no 22/98-CE(N.T.) is an independent notification for a different purpose non filing the declaration under the said notification cannot disentitle the assessee from availing the exemption under notification 08/2000-C.E. The demand for the period 01/04/2000-31/08/2000, up to the aggregate value of 50 lakhs is not sustainable and the same is set aside. Demand on the value exceeding ₹ 50 lakhs is sustainable - However the appellant may be, given the cum-duty benefit and accordingly the demand on the value exceeding 50 lakhs be re-computed by the Adjudicating Authority by extending the benefit of cum duty price. Penalty on proprietor - HELD THAT - It is a settled law that once the penalty on the proprietorship is imposed, no separate penalty on the proprietor can be imposed for the reason that proprietorship firm and proprietor is one and the same person. Accordingly, the penalty imposed on the proprietor under Rule 209A is set aside. Appeal disposed off by way of remand.

Summary

Issues:
Demand of Excise duty on clandestine removal of goods; Denial of SSI exemption under notification 08/2000-C.E. due to non-filing of declaration under notification 22/98-C.E. (N.T.); Cum duty benefit extension; Imposition of separate penalty on the proprietor.

Analysis:
1. The case involves demands of Excise duty for different periods due to clandestine removal of goods and denial of SSI exemption under notification 08/2000-C.E. The appellant did not contest demands of certain amounts but challenged the demand of &8377; 9,32,831/- stating that non-filing of declaration under notification 22/98 does not affect exemption under 08/2000. The tribunal agreed, setting aside the demand up to &8377; 50 lakhs but upheld the demand exceeding that value. The appellant was granted cum duty benefit, and the Adjudicating Authority was directed to recompute the demand accordingly.

2. The appellant argued for cum duty benefit extension, citing relevant judgments. The tribunal accepted this argument and directed the re-computation of demands of &8377; 27,197/- and &8377; 58,892/- by extending the benefit of cum duty price.

3. Regarding the imposition of a separate penalty on the proprietor, the appellant contended that once a penalty on the proprietorship is imposed, no separate penalty on the proprietor should be levied. The tribunal agreed with this argument, setting aside the penalty imposed on the proprietor under Rule 209A. It was held that the proprietorship firm and proprietor are considered one entity, leading to the disposal of the appeal by remanding it to the Adjudicating Authority for re-computation of duty and corresponding penalty.

4. The Revenue reiterated that non-filing of the declaration under notification 22/98-C.E. (N.T.) disentitles the appellant from availing exemption under notification 08/2000-C.E. The tribunal disagreed, stating that the conditions of the two notifications are independent, and non-filing of the declaration under 22/98 does not affect the exemption under 08/2000. The demand for the specified period was set aside up to a certain value, with directions for re-computation and extension of cum duty benefit. The penalty on the proprietor was also set aside based on established legal principles.

This comprehensive analysis outlines the key issues addressed in the judgment and the tribunal's decisions on each issue, providing a detailed understanding of the legal reasoning and outcomes.