Whether sugar syrup manufactured as intermediate product for use in biscuits is eligible for SSI exemption?

PJ/Case Law/2012-13/2038

Case:- SHAH FOODS LTD. V/S COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD-III

Citation: - 2013 (297) E.L.T. 454 (Tri.-Ahmd.)

Brief Facts:- The assessee filed this stay application for the waiver of pre deposit of duty amount of Rs. 10,52,955/-, interest thereof and equivalent amount of penalty. These amounts have been confirmed by the first appellate authority on the ground that the appellant is not eligible to avail benefit of small scale industry to the intermediate products manufactured by them which falls under Chapter 17.

Appellant’s Contention:-The appellants submit that they are manufacturing biscuits. During the course of manufacturing of the biscuits, they also have to manufacture sugar syrup, as a requirement, for manufacture of biscuits. It is their submission that the said sugar syrup falls under Chapter 17 of the Central Excise Tariff Act, 1985. They submit that the first appellate authority has held against them only on the ground that benefit of Notification No. 8/2006 is not applicable to the products which fall under Chapter 17. They made attention to the corrigendum issued by the Central Government, to notification which is reproduced in the appeal memoranda and submit that the product sugar falls under Chapter 17 has been subsequently included in Notification No. 8/2006. They submit that this corrigendum has not been considered by the first appellate authority to come to a conclusion. Hence, it is their submission that the matter may be remanded to the first appellate authority to reconsider the issue afresh.

Respondent’s Contention: -The Respondents submitted that the benefit of Notification No. 8/2006 needs to be claimed by the appellant and cannot be granted as such. At the same time it is his submission that the first appellate authority has not considered this corrigendum as it was not brought to his notice.

Reasoning of Judgment: - The Hon’ble Tribunal held that after hearing both the sides for some time on the stay petition, they find that the appeal itself could be disposed of at this juncture hence after allowing the application for the waiver of the pre-deposit of the amounts involved, they take up the appeal for disposal. They find that the entire issue revolves around the fact that whether the appellant is eligible for the benefit of SSI exemption under Notification No. 8/2006-C.E., dated 1-3-2006 on the intermediate products i.e. sugar syrup that comes into existence during the manufacture of biscuits. The said intermediate product sugar syrup is undisputedly classifiable under Chapter 17 of the First Schedule to the Central Excise Tariff Act, 1985. On perusal of the corrigendum to budget notifications which is reproduced by the appellant in his grounds of appeal, they find that the said corrigendum does indicate that the products fall under the Chapters 9 to 20 of the Central Excise Tariff Act, 1985 are included for the benefit of Notification No. 8/2006. Thus, they viewed that the first appellate authority needs to reconsider the issue in light of the said corrigendum to Notification No. 8/2006-C.E. Accordingly, without expressing any opinion on the merits of the case, keeping all the issues open, they set aside the impugned order and remand the matter back to the first appellate authority to reconsider the issue afresh after following the principles of natural justice.

Decision:- The appeal was allowed by way of remand.

Comment:-The analogy that is drawn from this case is that the intermediate product sugar syrup is undisputedly classifiable under Chapter 17 of the First Schedule to the Central Excise Tariff Act, 1985. The corrigendum to budget notifications also indicates that the products fall under the Chapters 9 to 20 of the Central Excise Tariff Act, 1985 are included for the benefit of Notification No. 8/2006. Hence, the said intermediate products are eligible for the exemption.

Comments

PJ/Case Law/2012-13/2038

Post a Comment

Query