2001 (8) TMI 569 - AT - Central Excise

Exclusion of Duty-Paid Goods from Exemption Limits Calculation Upheld

The Tribunal held that the value of goods cleared on payment of duty should not be included in computing the aggregate clearances for exemption limits ... SSI Exemption - Value of clearances, Computation of - Brand name Issues:- Whether the value of branded goods cleared on payment of duty should be considered while computing the aggregate clearance under Notification No. 175/86-CE dated 1-3-1986Rs.- Whether the value of clearances of goods cleared on payment of duty should be clubbed with the clearance of specified goods for the purpose of the notificationRs.Analysis:1. The appellant filed an appeal against the order passed by the Commissioner (Appeals) regarding the computation of aggregate clearance under Notification No. 175/86-CE dated 1-3-1986. The Commissioner (Appeals) held that the value of branded goods cleared on payment of duty should be taken into account for this purpose.2. The case involved the appellant, engaged in the manufacture of aerated water under various brand names. The issue was whether the clearance of aerated waters cleared on payment of duty should be clubbed with the clearance of other goods for calculating the exemption limit under Notification No. 175/86-CE dated 1-3-1986. The Revenue appealed before the Commissioner (Appeals) challenging the exclusion of the value of branded goods from the total clearances for exemption calculation.3. The Commissioner (Appeals) set aside the earlier order and allowed the appeal of the Revenue. The matter was then brought before the Tribunal, which remanded it back to the Commissioner (Appeals) for not confining to the grounds of appeal. The Tribunal emphasized that the eligibility of exemption under the said notification was crucial, directing the Commissioner to decide the issue accordingly.4. In the subsequent hearing, the appellant contended that as per Para-3 of Notification No. 175/86-CE, clearances of goods manufactured affixing brand names of ineligible persons should not be considered for calculating aggregate clearances. On the other hand, the Revenue argued that the value of goods cleared on payment of duty should be clubbed with specified goods for exemption calculation as per Explanation-II of the notification.5. The Tribunal analyzed the notification as a whole and referred to precedents where it was held that the value of clearances of goods cleared on payment of duty should not be included in computing the aggregate clearances for exemption limits. Relying on these precedents, the Tribunal set aside the impugned order and allowed the appeal in favor of the appellant.