Separate SSI exemption limits for each limited company supported a prima facie case for waiver of pre-deposit.

Limited companies were treated as separate manufacturers for purposes of the small scale industry exemption, and the CBEC circular stated that each company is entitled to its own exemption limit while computing aggregate clearances under Notification 175/86-C.E. and Notification 1/93-C.E. On that basis, the Tribunal found a strong prima facie case against denial of SSI exemption and against the penalties imposed under Rule 173Q of the Central Excise Rules, 1944, and granted waiver of pre-deposit.

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Issues: Whether waiver of pre-deposit of duty and penalties was justified on the strength of a prima facie case based on the entitlement of each limited company to a separate small scale industry exemption limit.

Analysis: The applicants were limited companies against whom duty was confirmed by denying the benefit of SSI exemption and penalties were imposed under Rule 173Q of the Central Excise Rules, 1944. The Tribunal noted the CBEC Circular No. 6/92 dated 29-5-1992, which stated that each limited company is a manufacturer by itself and is entitled to a separate exemption limit for computing aggregate clearances under Notification 175/86-C.E. and Notification 1/93-C.E. On that basis, the applicants had shown a strong prima facie case.

Conclusion: Waiver of pre-deposit was granted in favour of the applicants.

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