Supreme Court held that assessee was a SSI and entitled to exemption

1. Danmet Chemicals Pvt. Ltd manufactured Aerosol products, claiming exemption under Notification No. 120/84-CE and Notification No. 175/86-CE.

2. The Department issued show cause notice calling upon Danmet to show cause as to why Central Excise should not be demanded.

3. Commissioner held that respondent was not entitled to exemption.

4. CESTAT set aside the Commissioner’s order.

On appeal, the Supreme Court held as under:

5. There is no dispute whatsoever the product in question to be a preparation containing 70% or more of mineral oil apart from 20% petroleum oil. The product is predominantly a blended lubricating oil.

6. The Tribunal upon appreciation of the evidence available on record came to the correct conclusion that respondent-assessee continues to be a small- scale industry and entitles to the benefit of Notification No. 175/86 in respect of 'CRC Acryform'.

7. We are of the view that the Tribunal did not commit any error in holding that the extended period of limitation was not available to the Department for initiating the recovery proceedings under Section 11A (1) of the Act.

8. We hold that non-mentioning of the license agreement in the classification lists does not lead to the conclusion that there has been willful suppression of facts with intent to evade duty.

9. In view of our conclusion that there has been no suppression whatsoever, the question of imposition of penalty does not arise.

Case Reference - Commissioner Of Central Excise. vs M/S. Damnet Chemicals Pvt. Ltd.

Supreme Court of India