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of <h1>Appellant wins case: recovery of dues limited, penalty set aside. Bonafide belief in exemption notification deemed justified.</h1> <h3>M/s SUPREME LAMPS & M/s. Keesara Plastics Pvt. Ltd. Versus COMMISSIONER OF CENTRAL EXCISE</h3> M/s SUPREME LAMPS & M/s. Keesara Plastics Pvt. Ltd. Versus COMMISSIONER OF CENTRAL EXCISE - 2015 (327) E.L.T. 525 (Tri. - Del.) Issues involved:1. Entitlement to SSI exemption notification for goods manufactured under a brand name.2. Compliance with Chapter X procedure under Central Excise Rules, 1944.3. Barred by limitation for recovery of dues.4. Imposition of penalty based on non-compliance.Issue 1: Entitlement to SSI exemption notification for goods manufactured under a brand name:The case involved M/s. Supreme Lamps manufacturing electrical bulbs under the brand name of M/s. Kesara Plastics Pvt. Ltd. The dispute arose as the goods manufactured under a brand name were not entitled to the Small Scale Industries (SSI) exemption notification unless the procedure under Chapter X of Central Excise Rules, 1944 was followed. Despite the bulbs being used by the brand name owner for further manufacturing, the appellant did not adhere to the prescribed procedure, leading to the Revenue denying the benefit of the exemption notification.Issue 2: Compliance with Chapter X procedure under Central Excise Rules, 1944:The Revenue initiated proceedings against the appellant for recovery of dues due to non-compliance with the Chapter X procedure. The matter was referred to a larger bench due to conflicting decisions on whether following the Chapter X procedure was mandatory to avail of any exemption benefit. The larger bench, considering the latest decision in a relevant case, ruled in favor of the Revenue, emphasizing the compulsory nature of following the Chapter X procedure to avail any exemption benefit.Issue 3: Barred by limitation for recovery of dues:The appellant argued that the demand was barred by limitation as it was raised beyond the normal period of six months. They claimed a bonafide belief based on various court decisions during the relevant period that non-compliance with the Chapter X procedure did not result in denial of substantive benefit if other conditions were met. The Tribunal found that there was sufficient reason for the appellant to believe in the availability of the exemption notification during the relevant period, thus limiting the recovery within the statutory limitation period.Issue 4: Imposition of penalty based on non-compliance:The appellant's failure to disclose the manufacturing of branded goods and non-registration with the department led the Revenue to invoke a longer period of limitation. However, the Tribunal held that the appellant's belief in the exemption notification, based on prevailing court decisions, was bonafide. Consequently, the Tribunal set aside the penalty imposed on the appellant, considering the justified belief held by the appellant and the limitation period for recovery of dues.In conclusion, the Tribunal ruled in favor of the appellant, limiting the recovery of dues within the statutory limitation period and setting aside the penalty imposed, considering the appellant's bonafide belief in the availability of the exemption notification based on relevant court decisions during the relevant period.
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