M/s. M.M. Engineers Pvt. Ltd. (Unit I & Unit II) Versus Commissioner of GST & Central Excise Coimbatore
Central Excise
2019 (2) TMI 136 – CESTAT CHENNAI – TMI
CESTAT CHENNAI – AT
Dated:- 13-11-2018
Appeal Nos. E/856/2003 and E/1144/2004 – Final Order Nos. 42811-42812/2018
Central Excise
Ms. Sulekha Beevi C.S., Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical)
Shri R. Balagopal, Consultant for the Appellant
Shri L. Nandakumar, AC (AR) for the Respondent
ORDER
Per Bench
Both these appeals being connected, they were heard together and disposed by this common order.
2. Appellant in Appeal No. E/856/2003 is Unit – II whereas in Appeal No. E/1144/2004 is Unit -I of M/s. M.M. Engineers Pvt. Ltd.
3. Brief facts are that the appellants Unit – I are manufacturers of cranes and parts thereof. They were availing the SSI exemption under Notification No.1/93-CE and clearing goods without payment of duty. During October 1997, the officers visited the
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rayed that the said option may be extended to the appellant in Unit – I.
4.2 In respect of Unit – II, the ld. consultant submitted that they do not contest the duty liability for 1994 – 95, 1995 – 96 and also for 1996 – 97. It is argued by him that the demand for the period 1997 – 98 is not sustainable for the reason that for the previous year that is 1996 – 97, the turnover is less than Rs. 300 lakhs. Therefore, the appellant has rightly availed the SSI exemption provided in Notification No. 38/1997. In respect of Unit – II, the show cause notice demanded duty of Rs. 2,68,455/-. In respect of the year 1997 – 98, in para 12.5.2 of the adjudication order, the adjudicating authority has excluded the value of Rs. 84,585/- from the total turnover alleged in the show cause notice which is Rs. 3,00,56,769/-. The corresponding duty liability then would be reduced to Rs. 12,687/-. Further, if this amount of Rs. 84,585/- is reduced from the turnover of Rs. 3,00,56,769/-, the actual turnover f
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on 38/97 and the findings of the adjudicating authority that the appellant has already availed SSI exemption under 1/93 and was availing MODVAT credit and therefore is not eligible for the SSI exemption is incorrect. He therefore pleaded that the demand in the case of Unit – II for the period 1997 – 98 cannot sustain and the penalties imposed to the tune of Rs. 1,54,519/- also cannot sustain for the same reason.
5. The ld. AR Shri L. Nandakumar supported the findings in the impugned order.
6. Heard both sides.
7. The appellant is not contesting the duty liability in respect of Unit – I and is requesting only the benefit of reduced penalty of 25% of the duty amount in Appeal No. E/1144/2004. The said request of the appellant is legal and proper for the reason that the adjudicating authority ought to have given the option to pay the reduced penalty of 25% under section 11AC. Thus, the impugned order in Appeal No. E/1144/2004 stands modified to the extent of granting the option to pay
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te of duty at 60%/ 80%. The notification does not provide any bar for availing MODVAT credit. So also the notification in clause (iii) in para 2 states that when the manufacturer opts for benefit of this notification, the goods already cleared during the financial year prior to the SSI notification, the option shall be taken into account for computing the aggregate value of clearances. When the notification was introduced only in 27.6.1997, the appellants have availed the benefit of notification and paid reduced duty. The authorities below have wrongly denied this notification stating that since the appellant has availed MODVAT credit and also because they have availed notification 1/93, in the financial year, they are not eligible for benefit of 38/97. After perusing the facts, we hold that the appellant is eligible for the SSI benefit under Notification 38/97. It is also to be noted that the adjudicating authority for the period 1996 – 97 has excluded the value of Rs. 84,585/- and th
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