Tribunal grants appeal, overturns demand confirmation & penalty. Appellants entitled to SSI exemption under Notfn. No. 175/86.

The Tribunal allowed the appeal, setting aside the confirmation of demand and penalty imposition. It held that the appellants rightfully claimed the SSI exemption under Notfn. No. 175/86 as the Directorate of Industries did not revoke their valid certificate. Additionally, after deducting certain charges, the aggregate value of clearances for 1990-91 remained within the permissible limit, entitling the appellants to the exemption.

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Issues:
The appeal challenges the confirmation of demand and penalty imposition based on alleged misuse of exemption under Notfn. No. 175/86 and exceeding the aggregate value of clearances during the year 1990-91.

Misuse of Exemption under Notfn. No. 175/86:
The appellants, engaged in manufacturing portland cement, were accused of falsely declaring the investment in plant and machinery to avail SSI exemption. The Central Excise Authorities contended that the investment exceeded the permissible limit for the exemption. The appellants argued that they had obtained a valid SSI certificate from the Directorate of Industries, and the Central Excise Authority had no jurisdiction to challenge its validity. Citing relevant case law, the appellants asserted that the investment limit was not a condition under Notfn. No. 175/86. The Tribunal held that since the Directorate of Industries did not revoke the certificate despite being informed, the appellants rightfully claimed the SSI exemption.

Exceeding Aggregate Value of Clearances:
Regarding the aggregate value of clearances for 1990-91, the adjudicating authority included forwarding charges in the calculation, leading to the value exceeding Rs. 200 lakhs. The appellants contended that freight charges and trade discount should be excluded from the assessable value, which would bring the total below the threshold. The Tribunal agreed that after deducting these charges, the aggregate value remained within the permissible limit, thus entitling the appellants to the SSI exemption.

In conclusion, the Tribunal set aside the impugned order, allowing the appeal and granting any consequential relief as per the law.

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