SSI exemption and extended limitation: 100% EOU clearances cannot be clubbed with domestic clearances for threshold computation.
Clearances of a 100% EOU could not be clubbed with clearances from the appellant's domestic unit for computing the SSI exemption threshold under Notification No. 8/2003-CE, because export clearances are not home-consumption clearances unless expressly included. On that basis, SSI exemption could not be denied. The stated ground for invoking the extended period of limitation, namely non-disclosure of the units, was also found unconvincing on the record, so extended limitation was unsustainable. As a result, the demand and penalties could not be maintained and consequential relief followed.
Issues: (i) Whether the clearances of a 100% EOU unit could be aggregated with the clearances of the appellant's other unit for denial of SSI exemption under Notification No. 8/2003-CE. (ii) Whether invocation of the extended period of limitation was sustainable.
Issue (i): Whether the clearances of a 100% EOU unit could be aggregated with the clearances of the appellant's other unit for denial of SSI exemption under Notification No. 8/2003-CE.
Analysis: The notification limits the aggregate value of clearances for home consumption from one or more factories. Clearances for export are not to be treated as home consumption clearances, except where the notification specifically includes them. Since the Hosur unit was a 100% EOU, its clearances could not be clubbed with the appellant's Manali unit for computing the SSI exemption threshold.
Conclusion: The aggregation of the EOU unit's clearances was not permissible and the SSI exemption could not be denied on that basis.
Issue (ii): Whether invocation of the extended period of limitation was sustainable.
Analysis: The only basis stated for invoking the extended period was non-disclosure of the existence of the units to the department. That basis was found unconvincing on the record, and no sufficient ground for extended limitation was established.
Conclusion: Invocation of the extended period of limitation was unsustainable.
Final Conclusion: The demand and penalties could not be sustained, and the appeal succeeded with consequential relief.
Ratio Decidendi: For SSI exemption under Notification No. 8/2003-CE, clearances of a 100% EOU cannot be clubbed with domestic clearances for threshold computation, and extended limitation cannot be invoked without a convincing factual for suppression or comparable conduct.
TaxTMI 
AI Drafter ✕
TaxTMI 
