2015 (11) TMI 244 - AT - Central Excise

Tribunal overturns denial of SSI exemption due to clearance limit interpretation

The Tribunal set aside the order denying the Small Scale Industries (SSI) exemption to the appellants due to exceeding the clearance limit. The demand for ... Benefit of SSI Notification No.8/2003-CE dt. 01/03/2003 - Clubbing of turnover of exempted units situated in Baddi, Himachal Pradesh - Denial on the ground that aggregate value of clearances of all excisable goods of the two units i.e. the one at Hyderabad and the one at Himachal Pradesh put together has exceeded ₹ 400 lakhs during the financial year 2006-07, thereby making them ineligible for availing the benefit of SSI exemption for the period April 2007 onwards in terms of condition No2(vii) of the Notification Held that:- It is settled law that we cannot go into the intentions of the legislature, unless there is ambiguity or lack of clarity in the notification. The notification has to be implemented according to the meaning of the words and clauses used therein. It is nobody s case that Notification No.49/2003 and No.50/2003 have been mentioned in paragraph 4 of the notification. When Notification No.49 & 50/2003 have not been mentioned in paragraph 4, we cannot read the same into the notification. Therefore the impugned order cannot be sustained and accordingly we set aside the impugned orders - Decided in favour of assessee. Issues:1. Denial of benefit of SSI exemption to the appellant.2. Consequential demand for duty, interest, and penalty imposed.3. Interpretation of Notification No.8/2003 regarding aggregate value of clearances.4. Exemption of branded goods under Notification Nos.49 & 50/2003.Analysis:1. The case involved the denial of the benefit of Small Scale Industries (SSI) exemption to the appellants due to the aggregate value of clearances exceeding the specified limit. The appellants were manufacturing various products falling under different chapters of the Central Excise Tariff Act. The issue arose when the aggregate value of clearances from both their units exceeded the limit, making them ineligible for the SSI exemption.2. The proceedings resulted in a demand for duty, interest, and penalty on the appellants. The demand was based on the contention that the appellants had exceeded the threshold for availing the SSI exemption, leading to the imposition of duty and penalties equivalent to the amount demanded.3. The interpretation of Notification No.8/2003 was crucial in determining the eligibility of the appellants for the SSI exemption. The notification specified conditions regarding the aggregate value of clearances for home consumption by a manufacturer. The dispute centered around whether the value of branded goods exempted under other notifications should be considered for calculating the aggregate value of clearances.4. The appellants manufactured branded goods in Himachal Pradesh, exempted from duty under Notification Nos.49 & 50/2003. The question arose whether these branded goods fell under the purview of paragraph 4 of the SSI exemption notification, thereby impacting the calculation of the aggregate value of clearances. The Commissioner's view on including the value of branded goods for duty calculation was challenged, leading to a detailed analysis of the legislative intent behind the notifications.In the judgment, the Tribunal emphasized the importance of interpreting notifications based on the explicit wording and clauses without inferring additional conditions. It was clarified that unless there is ambiguity or lack of clarity, the intentions of the legislature should not be speculated upon. Since the specific notifications exempting branded goods were not mentioned in paragraph 4, the Tribunal concluded that the impugned order could not be sustained. Therefore, the Tribunal set aside the order, providing consequential relief to the appellant.