2026-VIL-663-CESTAT-KOL-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Duty Evasion, Trading vs Manufacturing - The appellant company was engaged in the manufacture and re-sale of Electrical Overhead Materials/Hardware Fittings. They claimed to have availed SSI Exemption on the manufactured goods and also undertook trading activities. The department alleged that the entire quantity of goods was manufactured by the appellant and not traded, and thus denied the SSI Exemption - Whether the appellant company was entitled to the benefit of SSI Exemption on its manufactured goods or the entire quantity of goods cleared should be considered for demand of duty - HELD - The department failed to conduct proper investigation to ascertain the trading activities of the appellant. No investigation was done at the supplier's end or the transporter's end to verify the appellant's claim of trading. The audited balance sheets produced by the appellant clearly showed the segregation of manufacturing sales and trading sales, which the department failed to consider. Relying on the decisions in Wintek Enterprises and Super Poly Fabriks Ltd., held that a document has to be read as a whole and the nomenclature or a particular activity cannot be decisive. Since the value of the manufactured goods fell within the SSI Exemption limit after deducting the trading sales, the demand of duty and penalties imposed on the appellant company and its director are set aside, and the appellant was held entitled to the benefit of SSI Exemption – The appeals are allowed
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