2016 (7) TMI 984

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....Film, falling under Chapter Heading 56.05 and 39.20 of the First Schedule to the Central Excise Tariff Act, 1985.  The Appellants has commenced production in the month of March 2004 and had allegedly incorrectly availed the benefit of SSI Notification No.9/2003-CE, dt.01.03.2003, for the period March 2004 and April 2004 to June 2004, without fulfillment of conditions laid down under the said notification.  A demand notice was issued on 11.04.2005, proposing recovery of duty short paid amounting to Rs. 8,69,711/- and penalty under Rule 25 of Central Excise Rules, 2002. On adjudication, the demand was confirmed and penalty of Rs. 1 lakh was imposed under the said Rules.  Aggrieved by the said order, the Appellants filed an appe....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ffective from the date of exercise of the option and shall not be withdrawn during the remaining part of the financial year.  Thus, the condition laid down is mandatory in nature and therefore, in view of the principle of law laid down by Hon'ble Supreme Court in the case of CCE New Delhi Vs Hari Chand Shri Gopal - 2010 (260) ELT 3 (S.C.) and CCE Pondichery Vs M/s Honda Siel Power Products Ltd - 2015-TIOL-247-SC-CX [=2015 (325) ELT 644 (S.C.)], non-fulfillment of the said condition would not make the Appellant eligible to the benefit of said notification.  5. Heard both sides and perused the records.  Before analyzing the condition in the said notification, it is necessary to reproduce the relevant clause of Notificati....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....xcess of the amount calculated at the rate specified in the corresponding entry in column (3) of the said Table :            Provided that nothing contained in this notification shall apply to a manufacturer who has availed the exemption under notification No. 39/2001-Central Excise, dated the 31st July, 2001, published in the Gazette of India vide number G.S.R. 565 (E), dated the 31st July, 2001, in the same financial year. Table S.No Value of Clearances Rate of duty (1) (2) (3) 1 First clearances up to an aggregate value not exceeding one hundred lakh rupees made on or after the 1st day of April in any financial year. Sixty per cent. of normal rate of....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ng the option; (iii) where a manufacturer opts for availing the exemption under this notification in terms of condition (i) above, the clearances of specified goods already made during the financial year, prior to the exercise of such option, shall be taken into account for computing the aggregate value of clearances, as specified in the said Table; Illustration 1. - A manufacturer who has been paying the normal duty on any goods during a financial year opts to avail of this exemption after making clearances having an aggregate value of rupees twenty lakhs. He is entitled under this notification to additional clearances of an aggregate value of rupees eighty lakhs at the concessional rate of sixty per cent, of normal duty.....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....uty at 60% of the normal rate of duty at the beginning of the financial year itself and the option once exercised, cannot be changed in the same financial year.  Needless to emphasize that the condition to exercise the option is the basis for availing the benefit of the exemption notification, and therefore, ought to be complied with so as to be eligible for the benefit of the said notification. The  condition 2 is mandatory one is further clear from a reading of sub-clause(iii) along with the illustrations enumerated thereunder.  Therefore, the said condition 2  cannot be  designated as a mere procedural one and to avail the benefit of the Notification need not be fulfilled.  Recently, the Hon'ble Supreme ....