Small scale industry exemption turns on stock verification and turnover exclusion of finished goods before duty date.

Eligibility for small scale industry exemption under Notification No. 8/2003-C.E. turned on whether finished goods allegedly in stock on 31.05.2006 had to be excluded from turnover and whether they were manufactured before 01.06.2006. The record did not conclusively establish the inventory position or the supporting documents at the adjudication stage. Because exemption eligibility depended on verification of stock and documents, the matter required factual reappraisal by the adjudicating authority and was remanded for reconsideration on the basis of the appellant's records.

---

---

Issues: Whether the stock of finished goods said to have existed on 31.05.2006 was required to be excluded while computing turnover for eligibility to small scale industry exemption under Notification No. 8/2003-C.E. dated 01.03.2003, and whether the demand required fresh verification of the appellant's records.

Analysis: The appellant claimed that the packed auto parts in stock on 31.05.2006 were manufactured prior to 01.06.2006 and therefore were not liable to duty, and that exclusion of such stock would bring the turnover below the exemption threshold. The record-based plea regarding the inventory and its effect on turnover was not examined conclusively at the adjudication stage. As the eligibility to exemption depended on verification of the stock and the supporting documents, a factual reappraisal was necessary.

Conclusion: The matter required verification by the adjudicating authority, and the issue was remanded for reconsideration on the basis of the documents produced by the appellant.

Final Conclusion: The controversy was not finally determined on merits and was sent back for factual verification, leaving the remaining issues open before the adjudicating authority.

---