SSI exemption cannot be denied for an inadvertent duty entry later reversed when the exemption claim was otherwise consistent.

Inadvertent charging of duty on some invoices did not amount to a conscious waiver of small scale industry exemption under Notification No. 8/2003-C.E. where the assessee had declared its intention to claim the exemption, filed returns showing nil duty liability, and reversed the mistaken entry once noticed. The Tribunal treated the duty mention as accidental rather than an election to forego the benefit, and held that such a mistake could not justify denial of exemption. The assessee was therefore entitled to the SSI exemption, and the departmental challenge failed.

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Issues: Whether the assessee was entitled to small scale industry exemption under Notification No. 8/2003-C.E. despite duty having been charged on some invoices by mistake and later reversed.

Analysis: The assessee had declared its intention to avail SSI exemption and filed returns showing nil duty liability. The duty entry on the invoices was found to be accidental, and the amount was reversed once the mistake was noticed. The Tribunal followed the earlier view that an inadvertent payment or charging of duty cannot be treated as a conscious option to give up the exemption benefit, particularly when the assessee had otherwise acted consistently with the claim for exemption.

Conclusion: The denial of SSI exemption was not justified. The assessee remained entitled to the benefit of the notification, and the departmental appeal failed.

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