SSI exemption ceiling cannot be crossed by reinterpreting abatement figures after notice and adjudication

Differential duty and penalty under the SSI exemption turned on whether the abatement figures in the show-cause notice and adjudication kept the assessee within the exemption ceiling. The record proceeded on abatement of freight and handling charges on a per PMT basis, and those figures left the assessee within the prescribed limit. The Revenue could not later recast the same figures as per load at the appellate stage to take the assessee outside the notification threshold. On that basis, the demand was held unsustainable and the SSI exemption entitlement was upheld.

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Issues: Whether the demand of differential duty and penalty could be sustained when the abatement figures recorded in the show-cause notice and accepted in the adjudication order kept the assessee within the SSI exemption ceiling limit.

Analysis: The figures in the show-cause notice and in the orders below showed abatement of Rs. 500 per PMT towards freight and Rs. 100 per PMT towards handling charges for cement sold within Pondicherry. On that basis, the assessee remained within the ceiling prescribed by the SSI exemption notification applicable at the relevant time. The Revenue could not, at the appellate stage, seek to reinterpret those figures as Rs. 500 per load and Rs. 100 per load when the notice and the adjudication proceeded on the basis of per PMT abatement. Since the assessee fell within the exemption limit on the figures actually adopted below, the demand had no sustainable basis.

Conclusion: The demand was rightly set aside and the Revenue's appeal failed.

Final Conclusion: The appeal was dismissed and the assessee's entitlement to the SSI exemption, as assessed on the figures recorded in the proceedings, was upheld.

Ratio Decidendi: The Revenue cannot later reinterpret the very abatement figures adopted in the show-cause notice and adjudication to take the assessee outside the SSI exemption ceiling when those figures, on their face, keep the assessee within the prescribed limit.

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