2024-VIL-196-CESTAT-ALH-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise – Section 11AC of Central Excise Act, 1944 – Rule 25(1) of Central Excise Rules, 2002 – Clearance of goods – Demand of duty – Appellant is engaged in manufacture of plastic caps & other plastic articles and cleared them without payment of duty by claiming SSI exemption under Notification No.8/2003-CE – After completion of investigation, department issued show cause notice proposing denial of exemption and demand of duty – Adjudicating authority confirmed demand of duty and imposed penalty under Rule 25(1) of the Rules read with Section 11AC of the Act – Whether Appellant is entitled for benefit of SSI exemption provided under Notification No.8/2003-CE – HELD – SSI Exemption is subject to conditions specified in it – Eligibility for SSI Exemption during a particular financial year shall be determined on basis of aggregate value of clearances of all excisable goods for home consumption during preceding financial year made from all factories of manufacturer – If aggregate value exceeds threshold limit, none of units would be eligible for SSI Exemption even if value of clearances for home consumption of all excisable goods made by each individual unit during preceding financial year is well within threshold limit for SSI exemption – If there is only one unit which is functioning unit and other units are just dummy units not actually engaged in manufacturing activities, duty would have to be demanded only from existing unit by treating other units as dummy units – Appellant being aware that their value of clearance has crossed exemption limit as provided by Notification No.8/2003-CE had created dummy unit to continue operating within exemption limit – Appellant have cleverly made a scheme for suppressing value of clearances with intent to evade payment of duty, for which they are also liable for penal action – Demand of duty is upheld – Penalty imposed on Appellant under Rule 25(1) of the Rules read with Section 11AC of the Act is justified – Appeal dismissed
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