2017 (4) TMI 1120

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....s made in the domestic market. They are also clearing the goods against form H to the merchant exporter for onwards export. The case of the department is that the clearances made under Form H to merchant exporter would not be eligible for deduction from the aggregate value of the exemption under notification no.8/2003-C.E. dated 01.03.2003. accordingly, the value of the clearance made under Form H to merchant exporter is liable to be added in the aggregate clearance value and due to which the exemption limits exceeds and the appellants is not entitled to SSI exemption. Consequently, the central excise duty demand was proposed. The adjudicating authority confirmed the demand contending that as per the Board circular no.648/39/02-CX dated 25.....

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.... to be merchant exporter and if the such sale is against Form H that means the goods sold to merchant exporter has been exported and only thereafter the sales tax department issued Form H for this reason only the Board has accepted Form H as proof of export. Therefore, the contention of the revenue that the goods should be exported directly from the premises of the respondent is absolutely incorrect. 4. I have carefully considered the submission made by both sides. The respondent is availing SSI exemption. The board circular dated 25.07.2002 prescribed simplified export procedure for small scale manufacturer. the Board circular is reproduced below:- "Subject : Export by SSI Units - Simplified Export Procedure - Clarification - R....

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....prescribed by the sales tax department viz. Form H/ ST-XXII form or any other equivalent sales tax form is accepted as proof of export. The adjudicating authority interpreted the circular in a manner the goods should be supplied directly from the respondent factory. As per the facts of the present case, I find that goods were directly supplied by the respondent manufacturer from their factory to the merchant exporter and who in turn exported the goods. Therefore, in my considered view, condition of circular that the export should be through merchant exporter itself stands fulfilled. Whenever the manufacturer's goods are exported through merchant exporter, invariably the goods are sold by raising invoice to the merchant exporter, thereaf....