SSI exemption claim under Central Excise was sustained where audited records were unrebutted and no segregated duty calculation was produced.

Central Excise duty demand was examined in the context of Small Scale Industry exemption under Notification No. 8/2003-CE, where the assessee manufactured both dutiable and non-dutiable goods and supported its exemption claim with sale details, challans, bills, photographs, service tax records and Chartered Accountant certificates derived from audited books and records. The demand was based on an allegation that certain clearances were not properly excluded while computing the exemption limit, but the Revenue did not produce any segregated duty calculation to dislodge the assessee's figures. In the absence of contrary material, the audited documents and Chartered Accountant certificates could not be ignored, and the demand was held not sustainable.

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Issues: Whether the demand of Central Excise duty could be sustained when the assessee claimed Small Scale Industry exemption, maintained accounts for other statutory purposes, and produced Chartered Accountant certificates and supporting records, but the Revenue did not produce a segregated calculation of duty liability.

Analysis: The assessee manufactured both dutiable and non-dutiable goods and claimed exemption under Notification No. 8/2003-CE dated 01.03.2003. The demand was founded on the allegation that the value of certain clearances had not been properly excluded while computing the exemption limit. However, the assessee produced sale details, challans, bills, photographs, service tax documents and Chartered Accountant certificates prepared from books of account and records verified by the auditor. The record also showed no segregated duty computation from the Revenue side to rebut the assessee's figures. In the absence of material contradicting the audited documents, the Chartered Accountant certificates could not be ignored.

Conclusion: The demand was not sustainable and the assessee was entitled to the benefit of the exemption.

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