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Acmefil Engineering Systems Pvt. Ltd. and Others V/S CCE-Ahmedabad-I

    Appeal Nos. E/1377 and 1391/2010 (Arising out of OIA-146-147/2010-AHD-I-CE/MM/COMMR-A-/AHD dated 09.06.2010 passed by the Commissioner (Appeals) of Central Excise and Customs, Ahmedabad-I) and Order Nos. A/11245-11246/2018

    Decided On, 20 June 2018

    At, Customs Excise Service Tax Appellate Tribunal West Zonal Bench At Ahmedabad

    By, THE HONORABLE JUSTICE: RAMESH NAIR
    By, MEMBER AND THE HONORABLE JUSTICE: RAJU
    By, MEMBER

    For Petitioner: S.J. Vyas, Advocate And For Respondents: Amit Kumar Mishra, Deputy Commissioner (AR)



Judgment Text


1. The brief facts of the case are that the appellants are availing SSI Exemption Notification No. 8/2003-CE dated 01.03.2003. Revenue denied the SSI Exemption for the financial year 2008-2009 on the ground that in the financial year 2007-2008, the appellant have crossed the threshold aggregate clearance value of Rs. 4 Crores.

2. Shri S.J. Vyas Ld. Counsel appearing on behalf of the appellants submits that during 2007-2008 on 31.03.2007 they have paid the duty of consignment of Spin Flash Dryer on the value of 29,85,000/- which was considered as the clearance upto 31.03.2007 against the total value of Rs. 29,85,000/-. The machine was removed and some of the consignments were cleared after 31.03.2007. It is his submission that since the entire duty was paid on or before 31.03.2007 and consignment of Spin Flash Dryer some part of the machine even though cleared after 31.03.2007 its clearance should be considered in the year 2006-2007. To that extent, the value during the year 2007-2008 will stand reduced then the aggregate value is well within the threshold limit of Rs. 4 Crores. Accordingly, they are entitled for exemption in 2008-2009. Alternatively, he submits that even if entire value is taken as aggregate value during the period 2006-2007, some of the clearances are of bought out parts sold as such that should not be considered as clearance of manufactured goods. Accordingly, its value shall be deducted from the overall aggregate clearance value, which the lower authorities have not considered properly. He further submits that the appellants have declared the details of the entire transaction and payment of excise duty in the Invoice No. 126 dated 31.03.2007, the same has been declared in monthly returns. Therefore, there is no suppression of fact accordingly the penalty under Section 11 AC for the penalty on the Director should not be imposed in absence of any malafide intention.

3. Shri Amit Kumar Mishra Ld. Deputy Commissioner (AR) appearing on behalf of the Revenue reiterated the findings of the impugned order. He submits that even though the duty was paid on or before 31.03.2007, but, it is not in dispute that the parts of the goods were cleared from the factory on or after 01.04.2007. As per the Notification No. 8/2003-CE dated 01.03.2003, it is clear that the value of clearance has to be considered for a particular financial year. Merely, by making payment of excise duty it cannot be considered as clearance of goods on the date of payment of duty. Therefore, the physical clearance made from the factory should be considered as clearance of the goods for the purpose of calculating the aggregate value of Rs. 4 Crores in the financial year. Therefore, the appellants are not eligible for SSI exemption as the aggregate value has crossed Rs. 4 Crores during the period 2007-2008. As regard the submission of removal of parts as such, he pointed out that this aspect has been considered by the Adjudicating Authority. According to which the adjudicating authority has accepted the value of Rs. 9,32,665/- of parts and Rs. 1,19,044/- of export and thereafter held that still the value exceeded Rs. 4 Crores.

4. We have carefully considered the submission made by both sides and perused the records. We find that from the invoice only certain part of the total consignment was cleared on 31.03.2007 vide invoice No. 126 dated 31.03.2007 which is for the value of Rs. 6,15,000/- and this invoice shown to have been issued for the value of 29,85,000/-, but, the clearance of the value over and above Rs. 6,15,000/- were made on or after 01.04.2007. In this fact, we are of the view that merely by making payment of excise duty on 31.03.2007 it cannot be said that the goods on which such duty was paid where the clearances of on or before 31.03.2007. Undisputedly, the physically goods were cleared on or after 01.04.2007, therefore, these clearances should be taken in the year 2007-2008. Accordingly, the aggregate value needs to be calculated. However, the appellants heavily made a submission that there are certain bought out items which were cleared as such, the value of sale of those bought out goods should not be added in the aggregate value of clearance for the purpose of SSI exemption. In this regard, we find that the Adjudicating Authority though given finding in respect of the clearances of 9,32,665/- and 1,19,044/- towards export, but, no specific finding was given in respect of the goods, namely, Spray Dryer valued at Rs. 19,00,000/- cleared vide invoice No. 117 dated 03.03.2008. To ascertain whether this value represent the correct value, it is necessary to find that whether the spray dryer supplied by the appellant is a manufactured goods or it is clearance of bought out goods as such. This aspect needs verification by the adjudicating authority. As regard the submission of the Ld. Counsel regarding the imposition of penalty under Section 11 AC, we find that the appellant have declared payment of duty as on 31.03.2007 in the invoice as well as in the monthly returns. The demand was also raised in the normal period of one year. In these c

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ircumstances, it cannot be said that there is a suppression of fact on the part of the appellants. Accordingly, we are of the view that the penalty under Section 11 AC should not have been imposed. Hence, the same is set-aside. For the same reason, the penalty on Director is also not justified, accordingly the penalty imposed under Rule 26 on the Director is also set-aside. As regard the demand of duty and interest on the appellant company, the matter is remanded back to the adjudicating authority. Appeal No. E/1391/2010 filed by Shri Ravi Gangadhran Nair is allowed.
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