By TIOL News Service

MUMBAI, JAN 31, 2018: THE assessee is in appeal against the order passed by the Commissioner(A). The period of dispute is 1995-97.

The brief facts are that the appellant was engaged in the manufacture of aluminium utensils. For this purpose, appellant collected scrap ingots and by melting the same in the furnace converted them to plates. These plates were cold rolled to get sheets of desired thickness from which circles were cut as per the required size of the utensils to be made out of it. The appellant claimed benefit of Notification no. 1/93-CE dated 28/02/1993 for the SSI exemption. The aluminium plates and sheets of utensils were exempted from the Central Excise duty as per the Notification no. 8/96-CX dated 23/04/1996. However, SSI exemption was denied to the appellant.

In the first round of appeal proceedings, the matter was remanded by the Tribunal, by its order dated 28/02/2002, to the adjudicating authority to examine whether the appellant is entitled for the benefit of Notification no. 1/93-CE.

Again, the SSI exemption was denied by both the lower authorities, so the assessee is before the CESTAT.

After considering the submissions made by both sides, the President, writing for the Bench observed thus –

"4. From the record, it appears that to avail the benefit of notification, the aggregate value of clearance of exempted goods is not to be taken into account. However, if the exemption is based on the value of clearances effected in the financial year such goods would not be treated as exempted goods. As per the ratio laid down in the case of Universal Electrical Industries v. Commissioner of Central Excise [1994 (70) ELT 279(Tri.)] which was upheld by the Hon'ble Supreme Court [2003 (153) ELT 266 (SC)] the intermediate goods which were used for the final products cannot be considered for the purposes of final valuation.

5. During the course of arguments, the learned representative of the department has drawn our attention to the computation by both the lower authorities where it was shown that the limit of SSI exemption was already exhausted by the appellant. But fact remains that the value of the intermediate product was included in the said computation. When it is so then we have to set aside the impugned order, with a heavy heart, and remand the matter for the second time to the original authority to decide the issue afresh in the light of the decision taken by the Supreme Court (supra) but by providing a reasonable opportunity to the appellant. Fresh evidence, if need be, admitted as per law."

The appeal was allowed by way of remand. The original authority was directed to decide the matter within a period of three months' as the matter was too old.

(See 2018-TIOL-386-CESTAT-MUM )