2019 (4) TMI 323 - AT - Central Excise

Tribunal allows SSI exemption for Rohad unit, overturns penalties under Central Excise Act.

M/s Iceberg Foods Limited, Shri R.S. Gupta, General Manager, Shri Dheeraj Goel, Director Versus Commissioner of Customs & Excise, Rohtak

The Tribunal allowed the appeals, finding that the main appellant was eligible for SSI exemption for their Rohad unit under the Central Excise Tariff Act, ... SSI Exemption - exemption not taken for some unit, therefore exemption denied for other units as well - Held that:- It is evident from the show cause notice against which this order has been confirmed against the appellants by the Lower Adjudicating Authority and Ld. Commissioner (Appeals) that states in para 8 thereof about in the show cause notice C.No. 7676-7678 dated 07.07.2005 decided in the case of M/S ICEBERG GOODS LTD., SHRI DHEERAJ GOEL, DIRECTOR, SHRI R.S. GUPTA, GENERAL MANAGER VERSUS CCE, ROHTAK [2015 (9) TMI 875 - CESTAT NEW DELHI] - The present Appeal before this Tribunal is pertaining to the same period and the fact that the Adjudication by the Tribunal has already been done for the earlier period 2003-04 and 2004-05 and the amount is also same i.e. ₹ 22,67,593/- this amount included the demand for period April to July 2005 as well. In view of the above, we are of the considered view that the department had not produced any order contrary to the order of this Tribunal. The same is applicable in the case in hand being recent judgment. Appeal allowed - decided in favor of appellant. Issues:1. Interpretation of SSI Exemption Notification for multiple manufacturing units.2. Eligibility for SSI exemption based on combined turnover of all units.3. Liability of Central Excise duty on failure to intimate about existence of other units.4. Applicability of penalty under Section 11AC of the Central Excise Act, 1944.Analysis:1. The case involved an appeal against an Order-in-Appeal passed by the Ld. Commissioner (Appeals) regarding the eligibility of the main appellant, engaged in the manufacture of packaged drinking water and aerated water, for SSI exemption under the Central Excise Tariff Act, 1985. The issue centered around the existence of other units manufacturing similar products under different brand names and whether the main appellant was required to intimate the department about these units while availing the SSI exemption.2. The Tribunal considered the previous judgment in a similar case where it was held that the manufacturer with multiple units is bound by the condition of combined turnover and a single option for exemption or duty payment. The Tribunal noted that the demand was confirmed based on the premise that duty was being paid in two other units, thus disqualifying the main appellant from SSI exemption for the Rohad unit. However, the Tribunal found that the department's interpretation did not align with the conditions of the Notification, which did not mandate the combined turnover of all units for exemption eligibility. Consequently, the appeals were allowed with consequential relief.3. The Lower Adjudicating Authority had confirmed the demand of Central Excise duty against the appellants for not availing the SSI exemption for their other two units, leading to the imposition of penalties under Section 11AC of the Central Excise Act, 1944. However, the Tribunal, based on the interpretation of the SSI Exemption Notification, found that the appellants were eligible for the exemption for their Rohad unit despite not availing it for the other units. As a result, the appeals were allowed, implying a reversal of the penalties imposed.4. The Tribunal's decision to allow the appeals was primarily based on the interpretation of the SSI Exemption Notification and the conditions for eligibility, rather than the failure to intimate the department about the existence of other units. By overturning the lower authorities' orders and providing relief to the appellants, the Tribunal clarified the application of the Notification in cases involving multiple manufacturing units and upheld the appellants' right to SSI exemption for their Rohad unit.