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2019 (7) TMI 254 - AT - Central ExciseSSI Exemption - use of brand names - manufacture of PVC soles by the appellant - HELD THAT - The brand names, have been used by the appellant is eligible for SSI exemption under Notification No. 3/2003 available to the appellant. The said Final Order relied upon the decision of Hon ble Delhi High Court in the case of COMMISSIONER OF CENTRAL EXCISE VERSUS MINIMAX INDUSTRIES 2011 (1) TMI 782 - DELHI HIGH COURT and following the same accordingly, SSI benefit is available to the appellant. Benefit of N/N. 4/2006 - Manufacture of PVC granules from old and used plastic materials - HELD THAT - The denial of exemption Notification No. 4/2006 (supra) is incorrect as the notification nowhere says that addition of some other material would disentitle the exemption notification in this regard. We find that the CBEC vide its Circular No. 52/94 dated 1.9.1994 has clarified the issue which favours appellant. Penalty - HELD THAT - As the demand against the main appellant is not sustainable there is no question of imposition of penalty on the other appellant and hence the same is also being set aside. Appeal allowed - decided in favor of appellant.
Issues:
1. Denial of SSI exemption on PVC soles manufacturing. 2. Valuation of PVC soles. 3. Alleged clandestine removal of goods without payment of duty. Issue 1: Denial of SSI exemption on PVC soles manufacturing: The case involved a demand against the appellant for Central Excise duty, interest, and penalties based on the denial of Small Scale Industry (SSI) exemption. The appellant was engaged in the production of PVC soles and brands like TRUE, JUMP, TOIAL, EXPORT, FLAXOLOGY APPLE & SINGAPORE. The Department contended that the SSI benefit was not applicable due to the appellant's association with these brands. However, the appellant argued that no evidence was presented to prove that they sold goods under these brands without paying appropriate Central Excise duty. The Tribunal referred to a previous order that held the benefit of SSI exemption was available to the appellant, citing relevant case law and circulars. It was concluded that the denial of the exemption was incorrect, and the impugned order was deemed unsustainable. Issue 2: Valuation of PVC soles: The appellant challenged the valuation of PVC soles at ?18 per sole or ?36 per pair, arguing that this valuation was without basis as the price in the footwear industry is typically quoted for pairs, not individual soles. The Revenue failed to provide independent evidence to support this valuation. The Tribunal noted the lack of substantiating evidence and found the valuation method flawed, supporting the appellant's contention. Issue 3: Alleged clandestine removal of goods without payment of duty: The Department alleged that the appellant cleared goods clandestinely without paying duty based on private records. However, the appellant disputed this claim, stating that no evidence was provided regarding the clandestine removal of goods. The Department failed to identify suppliers, purchasers, or provide inculpatory statements from individuals involved. The Tribunal found the demand not sustainable due to lack of evidence supporting the allegation of clandestine removal, citing relevant case law to support their decision. In the final judgment delivered on 3.7.2019, the Tribunal allowed the appeals, setting aside the demand against the main appellant and consequently the penalty imposed on the other appellant. The decision was based on the unsustainable nature of the demands and penalties due to lack of evidence and flawed reasoning presented by the Department.
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