2006 (6) TMI 392 - AT - Central Excise

Appeal partially allowed for SSI exemption eligibility assessment, focusing on duty calculations and penalty considerations.

The Tribunal partially allowed the appeal by remanding the case for a detailed year-wise assessment of clearances and job work value for SSI exemption ... SSI Exemption - Value of clearances Issues:Determining SSI eligibility based on value of printed cartons manufactured on job work basis.Analysis:The appeal was filed against the Order-in-Appeal passed by the Commissioner of Central Excise (Appeals), Bangalore, regarding the inclusion of the value of printed cartons in determining the SSI eligibility limit. The appellant, engaged in manufacturing printed cartons, availed SSI benefit under Notification 8/2003 while also doing job work for agarbathi manufacturers. The Revenue argued that the appellant manufactured printed cartons on job work basis, thus the value of goods cleared on job work should be included in SSI eligibility. The Commissioner (Appeals) upheld this contention, leading to the appeal.The appellant's advocate argued that the printing activity on job work basis does not amount to manufacture, hence the value of goods cleared on job work should not be included for SSI purposes. They cited case laws and a CBEC Circular to support this claim. The advocate also contended that the Commissioner (Appeals) erred in holding the appellant responsible for manufacturing cartons beyond the SSI limit without sufficient evidence. Additionally, they highlighted discrepancies in the duty demand calculation.The lower authority rejected the appellant's claim that they only undertook printing activity, citing statements from involved parties indicating the conversion of raw materials into cartons on the appellant's premises. The Tribunal agreed with the lower authority, stating that the appellant had indeed undertaken the process of conversion, not just printing. They directed that the value of job work should be included in clearances for SSI exemption eligibility, calculated year-wise. The matter was remanded to the Original authority for further assessment, including duty liability and penalties, with instructions to consider Cum-duty price and Modvat benefits.In conclusion, the Tribunal partially allowed the appeal by remanding the case for a detailed year-wise assessment of clearances and job work value for SSI exemption eligibility, emphasizing the need for accurate duty calculations and penalty considerations in line with relevant legal precedents.