2017 (11) TMI 1508 - AT - Central Excise

SSI Exemption Dispute: Importance of Evidence & Natural Justice in Manufacturing

The case involved a dispute over the eligibility for SSI Exemption Notification regarding the manufacturing of Electronic Controllers. The Commissioner ... SSI Exemption - submission of all relevant documents - Revenue says that all the documents were not submitted before the original order - Held that: - all the documents were very much vital on the issue of the subject that whether the goods were manufactured on job work basis if it is so even though the goods is branded the duty cannot be charged to the job worker if the goods are manufactured and cleared under N/N. 214/86 or N/N. 83/94 and 84/94-CE. Even if some documents were not be submitted by the respondent at the time of adjudication and if the same are submitted before the Commissioner (Appeals), the said documents cannot be brushed aside by the Commissioner - matter remanded to the adjudicating authority for denovo order - appeal allowed by way of remand. Issues:- Eligibility for SSI Exemption Notification- Submission of fresh evidence before the Commissioner (Appeals)- Manufacturing on job work basis- Duty liability and exemption under specific notificationsEligibility for SSI Exemption Notification:The case involved the respondent engaged in manufacturing Electronic Controllers for Air Conditioners/Chillers under the brand name of M/s Blue Star. The department contended that the goods, being branded, were not eligible for SSI Exemption Notifications. The adjudicating authority upheld the demand, leading to an appeal by the respondent. The Commissioner (Appeals) remanded the matter for a denovo order, which was challenged by the Revenue.Submission of Fresh Evidence:The Revenue argued that the fresh evidence submitted by the respondent before the Commissioner (Appeals) should not have been entertained, as these documents were not presented during the original order. The Commissioner (Appeals) considered documents related to job work transactions, leading to the remand order, which the Revenue contested as improper.Manufacturing on Job Work Basis:The respondent's advocate highlighted that the principal manufacturer sent materials under specific rules and notifications applicable to SSI units. The documents submitted were deemed crucial for determining whether the goods were manufactured on a job work basis. The Commissioner (Appeals) remanded the matter for further examination by the adjudicating authority.Duty Liability and Exemption under Specific Notifications:The Tribunal's findings referenced previous judgments emphasizing that duty liability lies with the supplier in job work scenarios. The documents submitted by the respondent were deemed essential to establish whether the goods were manufactured and cleared on a job work basis, potentially making them eligible for exemption under specific notifications. The Commissioner (Appeals) decision to remand the matter was upheld, dismissing the Revenue's appeal and disposing of the cross-objection.In conclusion, the judgment upheld the remand order by the Commissioner (Appeals) for a denovo examination by the adjudicating authority based on the crucial documents submitted regarding job work transactions and the application of specific notifications for duty liability and exemption. The decision emphasized the importance of considering all relevant evidence and applying principles of natural justice in determining eligibility for exemptions and duty liabilities in manufacturing scenarios.