Case Law Details
Universal Packaging Vs Commissioner of Central Excise (CESTAT Mumbai)
The legality of availing Small Scale Industries (SSI) exemption without including the value of supplies to Merchant Exporters has been challenged in four appeals. The appellant, a manufacturer of Corrugated Carton Boxes, had availed the SSI exemption under Notification No. 8/2003. However, periodic show-cause notices were served, demanding duty based on a clarificatory circular that excluded the benefit of non-inclusion of value for supplies made to domestic manufacturers who may or may not export finished products. The Commissioner (Appeals) confirmed the duty demand and penalties, but the CESTAT ruled in favor of the appellant, stating that the inclusion of such values for determining tax liability exceeded the SSI exemption limit and was not sustainable in law or fact. CESTAT referred previous judgments in support of this ruling.
FULL TEXT OF THE CESTAT MUMBAI ORDER
Legality of availment of SSI exemption under Notification No. 08/2003-CE(NT) dated 28.02.2003 without including value of supplies to Merchant Exporters that resulted in confirming duty demand through three Orders-in-Original for the period from 2006 onwards vide Order-in-Original No. 132-134/13-15/V/2008/JC/KNP dated 30.06.2008 along with confirmation of penalties on the Appellant company as well as on its Managing Partner, that got confirmed vide Order-in-Appeal No. 53-54/MV/2004 is assailed in these four appeals.
2. Bereft of unnecessary detail, it is to be noted here that Appellant is a manufacturer of Corrugated Carton Boxes. It had availed SSI exemption available under Notification No. 8/2003 dated 28.02.2003 but was served with periodic show-cause notices dated 12.09.2006, 12.03.2007 and 11.09.2007 respectively with duty demand on the ground that clarificatory Circular No. 648/39/2002-CX dated 25.07.2002 issued by the Central Excise and Customs Board has clearly indicated that exempted units who undertake export themselves or through Merchant Exporters directly from the units itself would get only the benefit of non-inclusion of the value of those manufacture goods (boxes) for the purpose of computation of the ceiling in the SSI exemption Notification and the same would not be available to the supplies made to any other domestic manufacturer who may export or may not export 100% finished product. Confirmation of the duty demand including interest and penalties on the Appellant by the Commissioner (Appeals), on the basis of the said clarificatory Circular, has brought the dispute to the present forum.
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