Custom, Excise & Service Tax Tribunal
Cce, Chennai vs M/S. Life Style International Pvt. Ltd on 7 September, 2010
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
E/681/2004
(Arising out of Order in Appeal No. 24/2004 (M-II) dated 10.02.2004, passed by the Commissioner of Central Excise (Appeals), Chennai).
For approval and signature
Honble Ms. JYOTI BALASUNDARAM, Vice President
Honble Dr. CHITTARANJAN SATAPATHY, Technical Member
_________________________________________________________
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CCE, Chennai : Appellant
Vs.
M/s. Life Style International Pvt. Ltd., : Respondent
Appearance Shri V.V. Hariharan, JCDR, for the appellant None for the respondent CORAM Ms. JYOTI BALASUNDARAM, Vice President Dr. CHITTARANJAN SATAPATHY, Technical Member Date of hearing : 07.09.2010 Date of decision : 07.09.2010 ORDER No._____________ Per: Jyoti Balasundaram, The assessees herein are registered merchant manufacturer of readymade garments availing the benefit of exemption with effect from 01.05.2001. The value of clearances made by them during the year for home consumption from May, 2001 to March, 2002 worked out to Rs. 3 crores approx. and the value of clearances during April, 2001 was approximately Rs. 36 lakhs. It was alleged by the department that the total value of clearances exceeded Rs. 3 crores limit and therefore the assessees were not eligible to the exemption under Notification No. 8/2002 dated 01.03.2002 during the year 2002-2003, in view of proviso to condition 3 of the Notification which stated that provided that the clearances for home consumption of goods falling under Chapter 62 of the said First Schedule, whether on payment of duty or otherwise, between 1st April 2001 and 30th April 2001 (both days inclusive) shall be taken into account while computing the aggregate value of clearances for the financial year 2001-2002. The adjudicating authority held that the assessees were not eligible to exemption under the said notification and therefore duty of Rs.3,32,986/- together with interest paid by them on 09.05.02 was correct and their protest for the said payment of duty was vacated. The Commissioner (Appeals) set aside the demand; hence this appeal by the Revenue.
2. We have heard the Ld. JCDR and perused the records, as none appeared for the respondents in spite of notice. The finding of the lower appellate authority is that what is required to be taken into account is only the value of clearances of the assessees themselves and not the value of clearances of readymade garments made by them on job work basis. His findings are reproduced herein below:-
(i) What is required to be taken into account, as per the proviso is the value of clearance for home consumption. In April, 2001 the appellant had no clearance for home consumption; appellants retail sale in show rooms were sale of bought out goods and was not clearance for home consumption. In excise parlance clearance for home consumption always means clearance from a factory or from any other approved place; which is not the case here.
(ii) The turnover (of April -2001) sought to be added by the Revenue to reckon the aggregate value of clearances was the retail sales turnover of bought-out goods by the appellants; whereas the value of very same goods stood assessed at the hands of physical manufacturer of these goods.
(iii) Even after May-2001 that is when the merchant manufacturer concept was introduced the value of clearance is attributed to only one, namely to the merchant manufacturer and not both to physical manufacturer of readymade garments and merchant manufacturer at the same time. The goods sold in April-2001 by the appellant were the value of clearances of physical manufacturer and stood accounted against those respective physical manufacturers. So it cannot be the value of clearance of appellant also at the same time.
(iv) The words whether on payment of duty or otherwise occurring in the proviso is to be understood in its perspective and the lower adjudicator has understood it to mean that anything and everything can be included to calculate the aggregate value of clearances. That is why he has included the turnover of a physical manufacturer with that of a merchant manufacturer. In April-2001, readymade garments were either exempted or dutiable depending on the status of the brand name. Garments with registered brand names were dutiable and those with unregistered brand names were exempted. So in April-2001, there could be both duty paid as well as exempted clearances in the hands of physical manufacturers of garments. Such clearances, whether on payment of duty of otherwise was required to be included while computing the aggregate value of clearances for the year 2001-2002 to decide the status and eligibility of actual manufacturers for SSI exemption. This is the real purport and meaning of the words whether on payment of duty or otherwise occurring in the proviso and it is incorrect to mean retailers sales turnover. The proviso will have application only to a physical manufacturer or to a merchant manufacturer who also had physical manufacturing facility and not to cases like that of appellants who had no physical manufacturing facility at any point of time but are retail traders.
3. The revenue has not satisfactorily explained as to why the above reasoning of the lower appellate authority is not sustainable. We agree with the finding that exemption is available to the assessees in other words we hold that the lower appellate authority is correct in not including the value of clearances of readymade garments on job work basis during the month of April, 2001. We, therefore, uphold the impugned order and reject the appeal.
(Order dictated and pronounced in the open Court)
(Dr. CHITTARANJAN SATAPATHY) (JYOTI BALASUNDARAM)
TECHNICAL MEMBER VICE PRESIDENT
BB
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