By TIOL News Service

CHENNAI, OCT 06, 2018: A SCN dated 03.09.1999 was issued demanding CE duty of Rs.5,95,721/- alleging that the assessee had clandestinely removed excisable goods.

The adjudicating authority confirmed the demand and the appellate authorities upheld the same.

The assessee is before the Madras High Court against the order dated 29.02.2016 passed by the CESTAT- 2016-TIOL-1574-CESTAT-MAD.

The only point canvassed is that the adjudicating authority as well as the tribunal did not consider the benefit of the Notification No. 8/98-CE dated 02.06.1998, by which the assessee is exempted from payment of excise duty, since their clearances, even as per the amount mentioned in the show cause notice is only Rs.23,82,886/-, which is well below the threshold limit.

The High Court noted that this point raised by the assessee was considered by the original authority and the same was rejected by observing thus -

" 59.2.1) Regarding their eligibility for the benefit of Notification 8/98 dated 2.6.98, I find that MPPL have not produced any evidence to prove their eligibility to the Notification ie., their aggregate value of clearances of all excisable goods for home consumption is not above three hundred lakhs during the preceding financial year. I also find that they have paid duty in PLA for scrap during the financial year 1998-99 amounting to Rs.81,551/-. As per para 2 of the said Notification.

" A manufacturer has the option to not to avail the exemption under notification and to pay the normal rate of duty on the goods cleared by him. Such option, if exercised shall not be allowed to be withdrawn in the remaining part of the financial year 1998-99"

59.2.2) I find that by paying duty on scrap cleared during the financial year 1998-99, the MPPL has exercised their option to pay normal rate of duty and they have no option but to pay normal rate of duty for further clearances and the option cannot be withdrawn. Hence they are not eligible for the benefit of  Notification 8/98  dated 2.6.98".

Furthermore, the Tribunal too had considered the factual aspects and concurred with the view taken by the adjudicating authority, after perusing the materials placed on record, the High Court added.

The High Court also observed that it cannot review the factual situation, which was considered by the adjudicating authority and re-appreciated by the appellate tribunal.

Relying upon the apex court decision in M/s. Dilip Kumar and Company & Ors in Civil Appeal No.3327 of 2007 dated 30.07.1998 =  2018-TIOL-302-SC-CUS-CB , the High Court held -

"8. …, the exemption notification should be interpreted strictly and the burden of proving the applicability would be on the assessee to show that his case comes within the parameters of exemption notification. In the instant case, the asseessee has miserably failed to prove that their case comes within the conditions stipulated in the exemption notification. Therefore, we are of the considered view that the tribunal as well as the adjudicating authority have rightly rejected the case of the assessee."

The appeal was dismissed.

(See 2018-TIOL-2075-HC-MAD-CX)