Cholomandal Marine Fibres Vs. Commissioner of C. Ex. - Court Judgment

Excerpt:

.....monofilament yarn of high density polyethylene is their intermediate product falling under sh 5406.11, which is captively consumed in the manufacture of the final product (monofilament twine). during the period of dispute (21-10-1994 to 12-1-1995), the appellants calculated their aggregate value of clearances of specified goods without taking into account the value of the monofilament yarn cleared for captive consumption, which calculation helped them clear their final product within ssi exemption limits. this action was questioned by the department in a show cause notice, which demanded differential duty and proposed penalty. the demand of duty was confirmed and a penalty of rs. 1 lakh imposed by the original authority. the decision of that authority was sustained by the commissioner (appeals). hence the present appeal.3. after considering the submissions of both sides, we find that the question whether captive clearance of intermediate products, which are exempt from payment of duty under general exemption notification (no.4/97-c.e., dated 1-3-1997 equivalent to no. 62/87-c.e., dated 1-3-1987 involved in the instant case), is includible in the aggregate value of.....

Judgment:

1. After examining the records and hearing both sides, we are of the view that the appeal itself requires to be finally disposed of at this stage. Accordingly, after dispensing with pre-deposit, we proceed to deal with the appeal.

2. The appellants are engaged in the manufacture of excisable goods specified for SSI benefit. Monofilament yarn of high density polyethylene is their intermediate product falling under SH 5406.11, which is captively consumed in the manufacture of the final product (Monofilament twine). During the period of dispute (21-10-1994 to 12-1-1995), the appellants calculated their aggregate value of clearances of specified goods without taking into account the value of the Monofilament yarn cleared for captive consumption, which calculation helped them clear their final product within SSI exemption limits. This action was questioned by the department in a show cause notice, which demanded differential duty and proposed penalty. The demand of duty was confirmed and a penalty of Rs. 1 lakh imposed by the original authority. The decision of that authority was sustained by the Commissioner (Appeals). Hence the present appeal.

3. After considering the submissions of both sides, we find that the question whether captive clearance of intermediate products, which are exempt from payment of duty under general exemption Notification (No.4/97-C.E., dated 1-3-1997 equivalent to No. 62/87-C.E., dated 1-3-1987 involved in the instant case), is includible in the aggregate value of clearances of specified goods for the purpose of determining duty liability in terms of SSI exemption Notification (No. 175/86-CE. dated 1-3-1986 and No. 1/93-C.E., dated 28-2-1993) has already been decided by this Bench in favour of the assessees in a batch of appeals vide Final Order No. 923-944/2006, dated 28-9-2006 2007 (211) E.LT. 97 (Tri.-Chennai) in the case of Gothi Thermoforming Industries and Ors.

v. Commissioner of Central Excise, Chennai & Pondicherry. It was held that the captive clearance value was not includible in the aggregate value of clearances of specified goods. Accordingly, we do not find any fault with the action of the appellants, who excluded captive clearance value from the aggregate value of clearances of specified goods, during the period of dispute for the purpose of claiming SSI benefit under Notification No. 1/93-C.E. ibid.

4. The impugned order which denies SSI benefit to the assessee is set aside and this appeal is allowed.