Pankil Textiles Vs Commissioner of Central Excise & ST (CESTAT Ahmedabad)
The appeal arose from an order dated 20.08.2013 passed by the Commissioner (Appeals), which upheld the adjudication order dated 28.02.2011 denying Small Scale Industry (SSI) concessional duty benefits and confirming demand of duty, interest, and penalty against the appellant for the period November 1996 to March 1997.
The factual background shows that the earlier manufacturer, M/s. Pimtex Texturising Private Limited (PTPL), operated two units at Surat and Kim. During the financial year 1995–96, PTPL’s aggregate turnover exceeded ₹300 lakh, rendering it ineligible for SSI exemption for 1996–97 and requiring payment of full duty from the first clearance. Despite this, PTPL paid concessional duty during April and May 1996 and thereafter paid full duty from June 1996. PTPL surrendered its registration on 28.10.1996, and the appellant obtained registration on 15.11.1996.
The department took the view that since PTPL had crossed the turnover threshold in 1995–96, the factory was not eligible for SSI exemption in 1996–97 even if operated by a new manufacturer. Show cause notices were issued demanding duty for November 1996 to March 1997 along with penalties. The adjudicating authority denied SSI benefit and imposed duty and penalty, which was initially set aside by the Commissioner (Appeals) in 1999. On departmental appeal, the Tribunal remanded the matter for reconsideration in light of case law on SSI exemption and “first clearance.”
