VADAPALANI PRESS Vs. CCE

JUDGEMENT

(1.) THE appellants are engaged in the manufacture of "printed cartons". During the period 2002 -05, they cleared this product without payment of duty by availing themselves of the benefit of SSI exemption under Notification No. 8/2002 -CE and its successor Notifications whereunder total exemption from payment of duty was available to clearances of specified excisable goods upto the aggregate value prescribed for the respective financial years. This limit was Rs. 1 crore for 2002 -03 and Rs. 3 crores for each of the remaining years. During the above period, the appellants had also cleared 'printed cartons' to customers like M/s. A.V. Thomas Leather & Allied Products Pvt. Ltd. (M/s. A.V. Thomas Co., for short) against certificates in "Form -H" issued by the latter and these customers exported cartons as packing material for their own goods. The appellants did not include the value of the cartons cleared to these customers for export, in the aggregate value of clearances of excisable goods for the purpose of determining their eligibility for SSI exemption. In other words, by excluding the value of the said clearances covered by "Form -H" certificates, the appellants found their aggregate value of clearances to be below the limit (Rs. 1 crore or Rs. 3 crores) for each of the financial years. After scrutiny of records and allied enquiries, the department came to know the method adopted by the appellants, and, in a show -cause notice, raised a demand of duty on them by re -computing the aggregate value of clearances above the limit of Rs. 1 crore/Rs. 3 crores and denying them the benefit of SSI exemption for the aforesaid period. This demand was raised under the proviso to Section 11A(1) of the Central Excise Act and Rules 4 & 8 of the Central Excise Rules, 2002. The SCN also sought to charge interest on duty under Section 11AB of the Act as also to impose penalties on the appellants under Section 11AC of the Act and Rule 25 of the above Rules. The demand of duty and other proposals in the SCN were contested. In adjudication of the dispute, the Commissioner held as under:

(2.) AFTER examining the records and hearing both sides, we find that the main issue arising for consideration in this case is whether the value of printed cartons cleared by the appellants to customers like M/s. A.V. Thomas Co. for export in a given financial year was liable to be included in the aggregate value of clearances in that financial year (2002 -03/ 2003 -04 / 2004 -05) for the purpose of determining their eligibility for SSI exemption for the said financial year as also for the next year. Ld. Counsel for the appellants relied on the Board's circulars No. 212/46/96 -CX. Dt. 20.5.1996 & No. 648/39/2002 -CX. dt. 25.7.2002 and submitted that a certificate in "Form -H" issued by a merchant -exporter in respect of excisable goods purchased by him from a SSI unit and subsequently exported was to be accepted as proof of export for purposes of SSI Exemption Notification. He also relied on the Tribunal's decision in the case of CCE Kanpur v. International Corrugators, 2005 (191) ELT 742 (Tri. -Del.), wherein a learned Single Member had held that corrugated boxes supplied by the SSI unit to their customer for packing shoes (for export) were not to be treated as a clearance for home consumption and hence not to be taken into account in the determination of aggregate value of clearances under Notification No. 8/2000 -CE (SSI exemption). Counsel pointed out that the decision in International Corrugators case was followed by a Division Bench of the Tribunal in the case of CCE Kanpur v. Radhey Paper Udyog and Anr. Final Order No. 114 -115/2005 -B dt. 27.1.2005 in appeal Nos. E/2656 & 2526/2004]. Reliance was also placed on the Tribunal's decision in Kansal Knitwears v. CCE Chandigarh, 2001 (136) ELT 467 (Tri. -Del.), wherein it had been held that the benefit of rebate of duty was not deniable in respect of inputs or intermediate products used in the manufacture of export goods, on the ground of non -compliance with any procedural requirement where proof of actual export was available. In the same context, ld. counsel also referred to the Supreme Court's judgment in Thermax Private Ltd. v. Collector of Customs . It was also pointed out that the appellants had established correlation between the cartons cleared by them for export and those actually exported by their customers and, therefore, it was not open to the Commissioner to reject the "Form -H" certificates produced by the appellants as proof of export.

(3.) LD . counsel also submitted that a part of the demand of duty was time -barred in the absence of suppression of facts etc. This submission was also contested by SDR.