By TIOL News Service

MUMBAI, AUG 01, 2018: THE appellant is engaged in the manufacture of excisable goods and availed SSI exemption under notification no. 9/2001-CE dt.01.03.2001 during the financial year 2001-02. The appellants were also manufacturing 'branded' goods at their Goa unit and availing exemption, as the said unit is situated in rural area.

The jurisdictional authorities were of the view that value of clearances of both the units should be clubbed in extending the benefit of notification no. 9/2001-CE dt.01.03.2000 to their unit at Mumbai.

The lower authorities confirmed the demand along with interest and penalty and, therefore, the appellant is before the CESTAT.

It is submitted that Tribunal for the earlier period on the same issue had interpreted the exemption notification no. 9/2000-CE and concluded that the appellants are eligible to the benefit of said notification;that the value of clearances at Goa unit cannot be clubbed with that of Mumbai unit. That judgment dt. 10.07.2008 is cited as - 2008-TIOL-2845-CESTAT-MUM.

The AR, while reiterating the findings of the Commissioner(A) fairly accepted that no appeal had been filed by the Revenue against the afore-cited order dt.10.07.2008 of the Tribunal.

The Bench observed that the Tribunal had on the earlier occasion interpreted the Notification no. 9/2000-CE dt. 01.03.2000 which is worded in similar line as Notification no. 9/2001-CE dt. 01.03.2001 and observed that the appellants are eligible to benefit of notification no. 9/2000-CE dt. 01.03.2000 and the value of clearance of their Goa unit cannot be added to the clearance value of Mumbai unit in computing the aggregate value of clearances under the said notification.

The Bench extracted paragraphs 7 & 8 of the said order and concluded thus -

"…We do not find any valid and justifiable reason in deviating from the aforesaid judgment. Consequently, the impugned order is set aside and the appeal is allowed with consequential relief, if any, as per law."

In passing: Extracts from the order - 2008-TIOL-2845-CESTAT-MUM -

7. We find that respondent has claimed the benefit of exemption under Notification No.9/2000 dated 1.3.2000. Clause 3 of Notification No.9/2000 dated 1.3.2000 is as under:-

"3 For the purpose of determining the aggregate value of clearances for home consumption, the following clearance shall not be taken into account namely:-

(a) clearances, which are exempt from the whole of the excise duty leviable thereon (other than an exemption based on quantity or value of clearances) under any other notification or on which no excise duty is payable for any other reasons;

(b) clearances bearing the brand name or trade name of another person, which are ineligible for the grant of exemption under this notification in terms of paragraph 4;

(c) clearances of specified goods which are used as inputs for further manufacture of any specified goods within the factory of production of the specified goods;

(d) clearances of strips of plastics used within the factory of production for weaving of fabrics or for manufacture of sacks or bags made of polymers of ethylene or propylene."

8. From the plain reading of the above clause, it is clear that the clearances, which are exempted from the whole of the excise duty is to be excluded, for arriving at the value of the clearances made by the respondent. In this case, the respondent at Mumbai unit, though having not declared the existence of Goa unit, cannot be deprived of the benefit of the Notification No.9/2000, as it is undisputed, that at Goa unit, the respondent has availed the benefit of Notification No.9/2000, which exempt the goods manufactured in the rural area, be it branded or unbranded. This factual position being not disputed, the question of clubbing clearances of value from Goa unit to the Mumbai unit does not arise."

Interestingly, the exemption to goods manufactured in “rural area” is available not by any other notification but the same exemption notification 9/2000-CE or 9/2001-CE in terms of clause 4(c) which reads -

4. The exemption contained in this notification shall not apply to the specified goods bearing a brand name or trade name, whether registered or not, of another person, except in the following cases :-

(a)…

(b)…

(c) where the specified goods are manufactured in a factory located in a rural area

And, therefore…

(See 2018-TIOL-2361-CESTAT-MUM)