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Judgment
Issue before us in this appeal is whether the value of goods destroyed in flood is to be added in the aggregate value of clearance by the unit availing SSI exemption.
Factual backdrop of the case, in a nutshell, is that appellant, a manufacturer, suffered loss and damage of its finished/semi-finished goods in an unprecedented rain and flood on 26.07.2020 in its factory area at Dombivli (East), Thane. They received back insurance claim from the Oriental Insurance Company and also sought remission of duty from the department. It was found by the respondent-department that by adding the value of finished goods lost in flood, appellant would reach the turnover of Rs.1,00,00,000/-in the month of October 2005 and would go out of the purview of SSI exemption availed by it, but it had not done so, for which it was put to show-cause notice for recovery of duty of Rs.3,41,590/- with interest under Section 11AB.
The matter was adjudicated upon whereby the duty demand of Rs.3,41,590/- with interest were confirmed by the adjudicating authority namely the Deputy Commissioner of Central Excise, Kalyan-III in his order dated 23.05.2008 that was reaffirmed by the Commissioner of Central Excise (Appeals), Mumbai Zone-I vide his order dated 23.02.2010 while dismissing the appellant's appeal preferred before him.
None appeared for the appellant but it has submitted a written note with a request to take the grounds mentioned in the note on record, while learned Authorised Representative for the respondent-department Mr. Sanjay Hasija submitted a compilation with two judgments of CESTAT Mumbai in the case of Global Exim [2015 (318) ELT 312 (Tri-Mumbai)] and of the Hon'ble Supreme Court in the case of Uttam Industries Vs. CCE Haryana [2011 (265) ELT 14 (SC)] and argued that exemption conditions are clearly stipulated in the Notification No. 08/2003-C.E. dated 01.03.2003 and it is a settled law that exemption notification is to be construed strictly and exemption notification should be strictly interpreted by reading it literally and as in Notification No. 08/2003 no exemption is referred in para 3 for damage by fire while determining value of goods cleared for home consumption, the same is to be added to the aggregate value in working out small scale exemption limit, for which he sought no interference by the Tribunal in the order passed by the Commissioner (Appeals).
We have heard the submissions and perused the case record as well as Notification No. 08/2003. Notification No. 08/2003 in para 2(vii) and para 3 clearly indicate that "aggregate value of clearance" for home consumption by a manufacturer is to be taken into account and admittedly para 3 has categorised 3 exclusions wherein damage by fire is not found mention. However, going by the strict literal interpretation of para 3 and 2(vii), it is crystal clear that only "clearances for home consumption" is to be taken into account and goods destroyed by fire were not clear for home consumption on any point of time but was directed by the insurance company to be destroyed as were unfit for consumption as revealed from the insurance settlement letter at page 30 of the appeal memo. This being the facts on record, we are of the considered view that value of such damaged goods, which were never cleared for home consumption, cannot be added to the total turnover. Hence the order.
ORDER
The appeal is allowed and the order passed by the Commissioner of Central Excise (Appeals), Mumbai Zone-I vide SB/28/Th-I/10 dated 23.02.2010 is here by set aside.
(Pronounced in the open court)