T.K. Jayaraman, Member (T)
1. This appeal has been filed against OIA No. 237/2004-CE dated 31.12.2004 passed by the Commissioner of Central Excise (Appeals-II) Hyderabad.
2. The appellants are manufacturers of edible refined oils falling under chapter sub-heading number 1502.00 and 1503.00 of Central Excise Tariff Act 1985. In 2003-2004 budget, duty at the rate of 8% was imposed on refined edible oils to be put in unit containers and cleared under the brand name. Duty on refined oil with any brand name at the rate of Rs. 1/- per Kg was imposed with effect from 30.4.2004. Vide Notification No. 37/03-CE dated 30.4.2004. The appellants availed SSI exemption under Notification 8/03-CE dated 1.3.2003 for the first clearance of Rs. 100 lakhs without taking into consideration the turn over of exempted goods for the purpose of computation of the aggregate value of clearances of Rs. 3 crores during the preceding financial year 2002-03. Revenue issued a show cause notice on the ground that during the previous year, the clearance of refined oil were to the tune of Rs. 7,70,50,933/- and hence, they were not entitled to the benefit of notification 8/03 during the financial year 2003-2004. Consequently the adjudicating authority demanded Rs. 2,25,468/- under Section 11A of the CE Act 1944. He demanded interest under Section 11AB of the CE Act. Further he imposed a penalty of Rs. 20,000/- on the appellants. The appellants appealed to the Commissioner (Appeals). The Commissioner (Appeals) upheld the order of the Original Authority. Hence, the appellants have come before this Tribunal for relief.
3. Shri V.J. Sankaram learned advocate appeared for the appellants and Shri Ganesh Havanur learned SDR appeared for the Revenue. Learned advocate urged the following points.
(1) In view of the decision of the Hon’ble Apex Court, in the case of Shyam Oil Cake Ltd. v. CCE, Jaipur , there was no manufacture of excisable goods during the year 2002-2003. Hence the turnover of refined oil amounting to more than Rs. 7 crores cannot be reckoned for deciding the eligibility of SSI benefit for the year 2003-2004.
(2) Further, he said that Chapter Note 4 to Chapter 15 was introduced only in 2003-2004. In view of the fact that during 2002-2003, there was no manufacture of excisable goods at all. Hence, the value of clearances in 2002-2003 should not be taken into account for deciding the eligibility in the subsequent year.
The learned SDR reiterated the OIO and the OIA.
4. We have gone through the records of the case carefully. The short point to be decided is whether the value of clearances during 2002-2003 should be taken into account in deciding the SSI exemption under Notification 8/03, dated 1.3.2003 during the year 2003-2004. Condition (vii) of the Notification 8/03 read as follows:
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 exceed Rs. 300 lakhs in the present financial year.
From the above, it is clear that the value of all excisable goods for the preceding year should be taken into account. The appellants during the year 2002-2003 which is the year preceding the year in which they availed the exemption Notification 8/03 cleared refined edible oils which attracted nil rate of duty up to March 2003. The mere fact that the above goods attracted nil rate of duty does not mean that they were not excisable during the above period. In other words, refined edible oils were very much excisable in 2002-2003, even though the same attracted nil rate of duty. Once, the goods cleared are held to be excisable condition (vii) of the Notification 8/03 is attracted. Since the value of clearance of refined edible oils is more than Rs. 7 lakhs, the appellants are not entitled for exemption in 2003-2004. The Supreme Court decision and the Chapter Note 4 to Chapter 15 introduced in Chapter 15 are not relevant for deciding the issue. Hence, the appeals are rejected.
(Pronounced in open Court on 1.9.2005).