SSI exemption and branded goods duty: prima facie case made against interest and penalty demand

An exempted unit under Notification No. 8/2003-C.E. was treated as remaining within the SSI exemption scheme even where duty was paid on branded goods manufactured alongside exempt goods. The note states that such payment of duty on branded goods, by itself, did not make the assessee a non-SSI unit or defeat eligibility under the notification. On that basis, the appellants were said to have made out a strong prima facie case against the demand of interest and penalty founded on the theory that duty on branded goods was payable by the 5th of the succeeding month, and unconditional stay was considered justified.

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Issues: Whether the appellants had made out a prima facie case for unconditional stay against the demand of interest and penalty arising from the treatment of duty on branded goods manufactured along with exempt goods under Notification No. 8/2003-C.E.

Analysis: The unit was operating as an exempted unit under Notification No. 8/2003-C.E., and the requirement to pay duty on branded goods also flowed from the same notification. On that basis, mere payment of duty on branded goods did not make the assessee a non-SSI unit or disqualify it from the exemption scheme. The appellants therefore showed a strong prima facie case against the demand raised on the footing that duty on branded goods was payable by the 5th of the succeeding month.

Conclusion: The appellants were entitled to unconditional stay.

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