2024 (11) TMI 1041 - AT - Central Excise

CESTAT sets aside order on SSI exemption under Notification 08/2003-CE for clubbing two units' clearance values

Universal Engineers Versus Commissioner of C.E. -Ahmedabad-i

CESTAT Ahmedabad set aside the Commissioner (Appeals) order regarding SSI exemption under Notification No.08/2003-CE for clubbing clearance values of two ... Eligibility of SSI exemption Notification No.08/2003-CE dated 01.03.2003 - clubbing of clearance value of two units - failure to consider various submission - violation of principles of natural justice - HELD THAT:- From the finding of this Tribunal, it can be seen that the Ld. Commissioner (Appeals) was directed to particularly, look into the financial transaction, day to day management etc. to arrive at conclusion of relationship between the two units. It was also observed that the Commissioner (Appeals) is supposed to reassess the evidences as brought out on record and also referred to specifically in the grounds of appeal and thereafter, applying the principles of natural justice reconsider the eligibility of SSI exemption Notification No.08/2003-CE. From the perusal of the impugned order, we find that the appellant have made multiple submissions such as limitation, discrepancy in issuance of the show cause notice and various records showing that there is no financial flowback and both the units are working separately and particularly, after certain stage, one factory was shifted to the different location. However, the Ld. Commissioner (Appeals) has not considered all this aspects in the proper perspective and passed the order without considering the various submissions and evidences produced by the appellant. The request of the Ld. Counsel on behalf of the appellant for remanding the matter is just and proper. Accordingly, the impugned order is set aside and the appeal is allowed by way of remand to Commissioner (Appeals) for passing a fresh order. Issues:1. Clubbing of two units for excise duty demand.2. Consideration of evidence and submissions by the Commissioner (Appeals).3. Application of SSI exemption Notification No.08/2003-CE.4. Dispute regarding limitation and show cause notice service.5. Financial flowback between the units.6. Request for remand of the matter.Analysis:1. The case involved the clubbing of two units, M/s. Universal Engineers and M/s. Ridhi Siddhi Enterprise, for excise duty demand. The department issued a show cause notice demanding duty on the clearance value of both units. The appellant submitted various documents to prove the separate entity of both units. The first appellate authority allowed the appeal, but the department appealed to CESTAT, Ahmedabad, which remanded the matter to re-assess the evidence and apply the law regarding SSI exemption Notification No.08/2003-CE.2. The appellant argued that the Commissioner (Appeals) did not consider key issues such as limitation, dispute over show cause notice service, and failure to appreciate the separate entity of both units despite documentary evidence. The appellant contended that duty demand should be separate for each unit and cited relevant case law to support their argument. The Commissioner (Appeals) upheld the demand without considering all submissions and evidence, leading to the appeal before the Tribunal.3. The Tribunal, in the second round of appeal, noted that the first remand order directed the Commissioner (Appeals) to assess financial transactions and day-to-day management to determine the relationship between the units. It was observed that the Commissioner (Appeals) failed to consider various submissions and evidence presented by the appellant, including the absence of financial flowback between the units and the separate operation of each unit. Consequently, the Tribunal set aside the impugned order and remanded the matter for a fresh decision.4. The appellant's request for remand was deemed justified by the Tribunal, as the Commissioner (Appeals) had not adequately considered crucial aspects of the case. The Tribunal allowed the appeal by way of remand to the Commissioner (Appeals) for a fresh decision, emphasizing the need to reassess the evidence and submissions in light of the principles of natural justice.This detailed analysis highlights the key legal issues, arguments presented by both parties, the Tribunal's considerations, and the ultimate decision to remand the matter for a fresh decision.