2017 (8) TMI 1036 - AT - Central Excise

Tribunal Upholds SSI Exemption Decision, Error Not Grounds for Denial

Commissioner of C. Ex. & S.T., Bhopal Versus Dwarka Insulation & Conductors P. Ltd.

The Tribunal upheld the Commissioner (Appeals) decision, granting the SSI exemption to the appellant. The mistake in charging excise duty on invoices was ... SSI exemption - N/N. 8/2003-C.E., dated 1-3-2003 - denial of exemption on the ground that during the period under consideration by mistake on the invoices, the excise duty were charged - When the mistake was realised the same was reversed - Held that: - the identical issue was decided in favor of the assessee in the case of Salvi Chemicals Industries v. CCE [2005 (1) TMI 432 - CESTAT, MUMBAI], where it was held that the assessee opted for the exemption benefit and the payment at normal rate for a limited period in respect of one of the product was an error on the part of the appellant and not their option - benefit of exemption allowed - appeal dismissed - decided against Revenue. Issues:1. Eligibility for SSI exemption due to a mistake in charging excise duty on invoices.Analysis:The appellant, engaged in manufacturing double paper covered aluminum wire, sought SSI exemption during the relevant period. Despite making a declaration to avail the benefit of SSI exemption and filing nil rate of duty clearances, excise duty was inadvertently charged on invoices. Upon realizing the error, the duty was reversed. The Commissioner denied the SSI exemption solely based on this mistake, but the Commissioner (Appeals) allowed it, considering it a bona fide error that did not result in any benefit to the appellant.Upon reviewing the case, the Tribunal noted a similar issue in the case of Salvi Chemicals Industries v. CCE, where it was held that a payment of duty due to a mistake does not nullify the exemption benefit claimed by the assessee. The tribunal observed that the appellant had opted for the exemption benefit and the duty payment error was not intentional. Consequently, the tribunal set aside the order of the Commissioner (Appeals) and reinstated the original adjudicating authority's decision, granting the exemption benefit to the appellant.In alignment with the precedent set in the Salvi Chemicals Industries case, the Tribunal found no justification to overturn the decision of the Commissioner (Appeals) in the present case. Therefore, the Tribunal upheld the Commissioner (Appeals) order, allowing the SSI exemption to the appellant. Consequently, the appeal filed by the department was dismissed, affirming the decision in favor of the appellant.