S.S.I.Exemption

[Guest]

If a SSI unit mistakenly pays duty on a few consignments during anytime in a F/Y and avails exemption thereafter, does it mean he will have to pay duty during remaining part of the F/y also. Is there any case law in support of the assessee.

[Rajagopalan Ranganathan]

Sir,

Para 2 (i) of Notification No. 8/2003-CE dated 1.3.2003 as amended stipulates that "a manufacturer has the option not to avail the exemption contained in this notification and instead pay the normal rate of duty on the goods cleared by him. Such option shall be exercised before effecting his first clearances at the normal rate of duty. Such option shall not be withdrawn during the remaining part of the financial year."

Therefore if you have paid duty on few consignment at the beginning of the financial year then you have to continue to pay duty during the said financial year and you cannot opt for availing the exemption during remaining part of the financial year.

[KASTURI SETHI]

Sh.Jagannath Prasad Ji,

There are so many case laws in favour of assessees. I am appending 4 case laws.As per EXCUS, all these judgements have been accepted by the department.

2005 (182) E.L.T. 170 (Tri. - Mumbai) = 2005 (1) TMI 432 - CESTAT, MUMBAISALVI CHEMICALS INDUSTRIES Versus COMMISSIONER OF CENTRAL EXCISE, MUMBAI

2004 (165) E.L.T. 228 (Tri. - LB) = 2003 (12) TMI 86 - CESTAT, NEW DELHIANKIT PACKAGING LTD. Versus COMMISSIONER OF CENTRAL EXCISE, HYDERABAD

2014 (301) E.L.T. 385 (Tri. - Del.) = 2014 (7) TMI 21 - CESTAT NEW DELHISIDDHARTH TANKS & VESSELS PVT. LTD. Versus COMMISSIONER OF C. EX., JAIPUR-I

2011 (270) E.L.T. 510 (Kar.) = 2010 (8) TMI 706 - KARNATAKA HIGH COURT COMMISSIONER OF C. EX., BANGALORE-II Versus CRESENT POLYMERS PVT. LTD.

2006 (201) E.L.T. 104 (Tri. - Del.) = 2006 (4) TMI 19 - CESTAT, NEW DELHI SYNDET INDIA PVT. LTD. Versus COMMISSIONER OF C. EX., KANPUR

AI Summary

Option to pay duty bars later SSI exemption claims for the remainder of the financial year, subject to cited case authorities. Notification No. 8/2003-CE para 2(i) allows a manufacturer to elect to pay normal duty instead of claiming the SSI exemption, provided the option is exercised before the first clearance at the normal rate and once exercised cannot be withdrawn for the remainder of the financial year; payment of duty on early consignments therefore precludes availing the exemption later in that financial year, although several tribunal and high court decisions have been cited as favourable to assessees and reported accepted by the department in EXCUS.