Oder date – 02 August 2022

Facts –

• The Appellant M/s. J and S Creations are engaged in manufacture of Printed Cartoons, Labels/Stickers/Tags, Paper Folders/Booklets etc. They cleared two products viz. ‘catch covers’ and ‘diaries’ falling under Chapter 48 of Central Excise Tariff Act, 1985, hence the benefit of Sno. 551 exemption Notification No.8/2003-CE, dated 01.03.2003 was not admissible.
• Appellant was served with two show cause notices dated 07.02.2011 and 09.03.2011 proposing denial of the benefit of the said notification and recovery of the duty not paid along with interest and penalty.
• Unsatisfied with the adjudicating authority, aggrieved they filed this appeal.

Issue –

• Whether the aggregate value of clearance products which were cleared by the Appellant affixing the brand name of others be included in the aggregate value of clearance of all excisable goods so as to determine the eligibility of SSI exemption?

Order –

• The Appellant Authority accepted the Tribunal’s opinion that the value of ‘catch cover’ cannot be included in the aggregate value of clearance in computing the aggregate value of clearance to extend the benefit of SSI exemption during the relevant period. Consequently, the value of aggregate clearance of ‘diaries’ be included in computing the exemption limit prescribed under the said notification for the period in question.
• The adjudicating authority relied on Kajal Print and Packing Pvt. Ltd. Vs CCE Mumbai case, in which it was concluded that the exclusion from exemption is applicable to goods which bear a brand name and the exclusion from coverage is limited to certain categories. Further, it was observed that catch covers are nothing but packing material and hence it is not a dispute.
• The matter is remanded back to the Adjudicating authority to determine the aggregate value of clearance and re-compute the demand with interest and penalty.