Custom, Excise & Service Tax Tribunal
Sarvotham Care Ltd vs Commissioner Of Customs ,Central ... on 28 May, 2015
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH CIRCUIT BENCH AT HYDERABAD Appeal(s) Involved: E/1032/2009-DB, E/179/2009-DB [Arising out of Order-in-Appeal No. 30-2009 dated 13/08/2009 and No. 75-2008 dated 28/11/2009 passed by CC,CE&ST(Appeals-II), Hyderabad] For approval and signature: HON'BLE SHRI JUSTICE G. RAGHURAM, PRESIDENT HON'BLE SHRI B.S.V.MURTHY, TECHNICAL MEMBER 1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3 Whether Their Lordships wish to see the fair copy of the Order? 4 Whether Order is to be circulated to the Departmental authorities? SARVOTHAM CARE LTD. PLOT NO.6-197/1,JEEDIMETLA VILLAGE,QUTUBULLAPUR MANDAL HYDERABAD Appellant(s) Versus Commissioner of Customs ,Central Excise and Service Tax HYDERABAD-IV NULL POSNETT BHAWAN, TILAK ROAD, RAMKOTI, HYDERABAD, - 500001 ANDHRA PRADESH Respondent(s)
Appearance:
Shri Mohd. Anwar Ali and Shri G. Mohan Rao, Advocates PRAMOD N. KATHAVI 8/8, II FLOOR, SANKALPA, 3RD MAIN ROAD, TATA SILK FARM, YEDIYUR, BANGALORE - 560070 KARNATAKA For the Appellant Shri Geelani Basha, Authorised Representative For the Respondent Date of Hearing: 28/05/2015 Date of Decision: 28/05/2015 CORAM:
HON'BLE SHRI JUSTICE G. RAGHURAM, PRESIDENT HON'BLE SHRI B.S.V.MURTHY, TECHNICAL MEMBER Final Order No. 21436-21437 / 2015 Per : B.S.V. MURTHY The facts, in brief, of this case are that the appellants are manufacturers of cosmetic and toilet preparations, pharmaceutical products and miscellaneous edible preparations falling under Chapter 33, 30 and 21 of the Central Excise Tariff Act, 1985. The appellants, in addition to their own products also manufacture branded goods pertaining to various companies. In respect of their own products, they were availing the benefit of SSI Notification No.8/2003-CE dt. 01/03/2003 as amended, during the period April 2007 to January 2008 and February 2008 to March 2008. The appellants have one more unit at Baddi, Himachal Pradesh engaged in the manufacture of branded goods pertaining to various companies. The said goods are exempt from payment of duty by virtue of Notification Nos.49 & 50/2003-CE dt. 10/06/2003 which are area specific exemptions. The case made out against the appellants is that aggregate value of clearances of all excisable goods of the two units i.e. the one at Hyderabad and the one at Himachal Pradesh put together has exceeded Rs.400 lakhs during the financial year 2006-07, thereby making them ineligible for availing the benefit of SSI exemption for the period April 2007 onwards in terms of condition No2(vii) of the Notification.
2. Proceedings initiated have culminated in denial of the benefit of SSI exemption to the appellant and consequential demand for duty of Rs.3,61,218/- with interest during the period from April 2007 to January 2008 and Rs.2,21,090/- with interest during the period from February 2008 to March 2008. Besides demand for duty and interest, penalty equal to the duty has also been imposed.
3. Heard both the sides.
4. According to the provisions of Notification No.8/2003 dt. 01/03/2003, in terms of para 2(vii), an assessee would not be eligible for the benefit of notification, if the aggregate value of clearances of all excisable goods for home consumption by a manufacturer from one or more factories or from a factory by one or more manufacturers, does not exceeds Rs.400 lakhs in the preceding financial year.
5. Paragraph 3(b) of the SSI exemption Notification No.8/93 dt. 10/03/2003 provides that clearances bearing the brand name or trade name of another person, who are ineligible for the grant of this exemption in terms of paragraph 4 shall not be taken into account for determining the aggregate value of clearances of all excisable goods for home consumption. Paragraph 4 denies exemption to specified goods bearing a brand name or trade name of another person and reads as under:-
4. The exemption contained in this notification shall not apply to specified goods bearing a brand name or trade name, whether registered or not, of another person, except in the following cases: -
(a) where the specified goods, being in the nature of components or parts of any machinery or equipment or appliances, are cleared for use as original equipment in the manufacture of the said machinery or equipment or appliances by following the procedure laid down in the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001:
Provided that manufacturers, whose aggregate value of clearances of the specified goods for use as original equipment does not exceed rupees one hundred lakhs in the financial year 2002-2003 as calculated in the manner specified in paragraph 1, may submit a declaration regarding such use instead of following the procedure laid down in the said Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001;
(b) where the specified goods bear a brand name or trade name of-
(i) the Khadi and Village Industries Commission; or
(ii)a State Khadi and Village Industry Board; or
(iii)the National Small Industries Corporation; or
(iv) a State Small Industries Development Corporation; or
(v) a State Small Industries Corporation;
(c) where the specified goods are manufactured in a factory located in a rural area.
(d) where the specified goods are account books, registers, writing pads and file folders falling under heading 4820 or 4821 of the said First Schedule.
6. In the instant case, the branded goods manufactured in Himachal Pradesh unit of the appellants are exempted from payment of duty by virtue of Notification No.49/2003 and No.50/2003. The question is whether the branded goods exempted under Notification No.49 and 50/2003 can be said to be covered by paragraph 4 thereby taking them out of purview of the SSI exemption notification. In the impugned order, Commissioner has taken a view that if the branded goods enjoy the SSI benefit by satisfying conditions in para 4, their value should be taken into consideration. There cannot be any dispute about this observation. However, he has taken a view that viewed in the context that if the items are covered by paragraph 4, their value has to be taken into account for the purpose of arriving at aggregate value of clearances of Rs.1.5 crores or Rs.4 crores, the value of such goods has to be taken into account. According to learned Commissioner, the intention is to charge duty on branded goods exception being paragraph 4. It is his view that since the appellants did not pay duty on the branded goods manufactured in Himachal Pradesh and when branded goods do not suffer duty, their value has to be included if they are exempt because of being covered under paragraph 4, the intention of the legislature or notification has to be taken as meaning that branded goods have to suffer duty and if they do not suffer duty, their value has to be taken into account for the purpose of determining aggregated value of clearances.
7. It is settled law that we cannot go into the intentions of the legislature, unless there is ambiguity or lack of clarity in the notification. The notification has to be implemented according to the meaning of the words and clauses used therein. It is nobodys case that Notification No.49/2003 and No.50/2003 have been mentioned in paragraph 4 of the notification. When Notification No.49 & 50/2003 have not been mentioned in paragraph 4, we cannot read the same into the notification. Therefore the impugned order cannot be sustained and accordingly we set aside the impugned orders with consequential relief, if any, to the appellant.
(Operative part of this order was pronounced on conclusion of the hearing) JUSTICE G. RAGHURAM PRESIDENT B.S.V.MURTHY TECHNICAL MEMBER Raja..
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