2007 (3) TMI 151 - AT - Central Excise

Tribunal overturns denial of SSI exemption for export value, upholds Form-H certificates as valid proof.

The Tribunal set aside the Commissioner's decision denying SSI exemption based on the inclusion of printed cartons' value in export clearances. It upheld ... SSI Exemption - Department denying the benefit of SSI Exemption on the ground that appellant has crossed the exemption limit and accordingly demand were made along with penalty - After considering the fact appeal is allowed by way remand Issues Involved:1. Inclusion of the value of printed cartons cleared for export in the aggregate value of clearances for SSI exemption.2. Validity of 'Form-H' certificates as proof of export.3. Applicability of interest and penalties.4. Time-barred demand of duty.Detailed Analysis:1. Inclusion of the Value of Printed Cartons Cleared for Export:The main issue was whether the value of printed cartons cleared by the appellants to customers for export should be included in the aggregate value of clearances for determining eligibility for SSI exemption for the financial years 2002-03, 2003-04, and 2004-05. The Commissioner had held that the value of clearances against Form H certificates should be included, thus denying the SSI exemption as the aggregate value exceeded the prescribed limits.2. Validity of 'Form-H' Certificates as Proof of Export:The appellants argued that Form-H certificates issued by merchant-exporters should be accepted as proof of export, relying on Board's circulars and previous Tribunal decisions. The SDR contended that the Form-H procedure was applicable only to unregistered SSI units and that the appellants, being a registered unit, could not use these certificates as proof of export. The Tribunal found substance in the appellants' claim, noting that the CBEC had accepted Form-H certificates as proof of export in their circulars. The Tribunal also referred to Rule 10(a) of the CST (R&D) Rules, 1957, which supports the use of Form-H certificates for exemption from sales tax, indicating that the sale was in the course of export.3. Applicability of Interest and Penalties:The Commissioner had imposed a penalty equivalent to the duty demanded and also held the appellants liable for interest under Section 11AB. The Tribunal did not specifically address the applicability of interest and penalties in the remand order but focused on the primary issue of the validity of Form-H certificates and the aggregate value of clearances.4. Time-Barred Demand of Duty:The appellants contended that part of the demand was time-barred due to the absence of suppression of facts. This submission was contested by the SDR. The Tribunal did not make a specific finding on this issue in the remand order but directed the Commissioner to re-examine the evidence and submissions.Conclusion:The Tribunal set aside the impugned order and remanded the case to the Commissioner for verification of the export details provided in the Form-H certificates. The Commissioner was directed to give the appellants an opportunity to present documentary evidence and be heard personally. The appeal was allowed by way of remand for this purpose, and the application for extension of stay was dismissed as infructuous.