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2010 (4) TMI 934 - AT - Central ExciseSSI exemption - CENVAT credit - simultaneous benefit - case of assessee is that the branded specified goods stand excluded from entitlement of benefit under SSI exemption notification and they are cleared on payment of duty and that therefore they cannot be denied the Cenvat credit facility and for availing such facility in relation to the specified goods for which the benefit is assured under the SSI exemption notification cannot be denied - Held that - The specified goods manufactured simultaneously in the brand name of the assessee himself are not excluded from availing the benefit of exemption under the said notification even though in case of the former goods the assessee seeks to avail the Cenvat credit facility in respect of the duty paid on the inputs utilised in the manufacture of the branded specified goods on which the full duty is paid while clearing the same. The conclusion that the notification in question in relation to the branded specified goods and simultaneous manufacture of non-branded specified goods even in a situation where Cenvat credit is sought to be availed in respect of the duty paid on the inputs utilised in the branded specified goods whereas the SSI exemption is sought to be availed in relation to the other goods finds support in the case of COMMISSIONER OF C. EX. HALDIA Versus SPRING KLEIN AQUA PVT. LTD. 2007 (9) TMI 169 - CESTAT KOLKATA . The demand of duty made while denying the benefit under the said notification cannot be sustained - appeal allowed - decided in favor of appellant.
Issues Involved:
1. Entitlement to simultaneous benefits of SSI exemption notification and Cenvat credit facility. 2. Applicability of the Apex Court decision in Commissioner of Central Excise, Ahmedabad v. Ramesh Food Products. 3. Interpretation of Notification No. 8/2003-C.E., dated 1-3-2003. 4. Determination of aggregate value of clearances for home consumption. 5. Exclusion of goods bearing another person's brand name or trade name from SSI exemption. Issue-wise Detailed Analysis: 1. Entitlement to simultaneous benefits of SSI exemption notification and Cenvat credit facility: The primary issue was whether the assessees could avail both the SSI exemption under Notification No. 8/2003-C.E., dated 1-3-2003, and the Cenvat credit facility. The lower authorities denied the benefit of SSI exemption on the ground that simultaneous availing of SSI exemption and Cenvat credit was not permissible. The appellants contended that the branded specified goods excluded from SSI exemption were cleared on payment of duty, and thus, Cenvat credit could not be denied for such goods. The Tribunal found that the notification allowed manufacturers to avail of Cenvat credit for branded goods while claiming SSI exemption for non-branded goods, provided the branded goods were cleared on full payment of duty. 2. Applicability of the Apex Court decision in Commissioner of Central Excise, Ahmedabad v. Ramesh Food Products: The authorities below relied on the Apex Court's decision in Ramesh Food Products to deny the benefit of SSI exemption. The appellants argued that the facts and issues in Ramesh Food Products were different and not applicable to the present case. The Tribunal agreed with the appellants, noting that Ramesh Food Products dealt with Notification No. 175/86-C.E., which had different conditions and was decided in a different factual context. Therefore, the decision in Ramesh Food Products was not applicable to the present case. 3. Interpretation of Notification No. 8/2003-C.E., dated 1-3-2003: The appellants argued that the notification clearly allowed the benefit of SSI exemption for goods manufactured under the assessee's own brand name, even if Cenvat credit was availed for inputs used in the manufacture of goods bearing another person's brand name. The Tribunal examined the provisions of the notification, particularly Clauses 3A(b), 4, and 1 in the Table, and concluded that the notification did not debar manufacturers from availing SSI exemption for non-branded goods while simultaneously claiming Cenvat credit for branded goods cleared on full payment of duty. 4. Determination of aggregate value of clearances for home consumption: The notification provided that for determining the aggregate value of clearances, goods bearing another person's brand name, which were ineligible for SSI exemption, should not be taken into account. The Tribunal noted that Clause 3A(b) specifically excluded such goods from the calculation of the total quantum of production for availing the benefit of SSI exemption. Therefore, the clearances of branded goods did not affect the entitlement to SSI exemption for non-branded goods. 5. Exclusion of goods bearing another person's brand name or trade name from SSI exemption: The notification excluded goods bearing another person's brand name or trade name from SSI exemption. The Tribunal found that the exclusion applied only to the branded goods and did not affect the entitlement to SSI exemption for non-branded goods manufactured by the assessee. The Tribunal cited various decisions supporting the view that full exemption under the notification was available for goods manufactured under the assessee's own brand name, even if Cenvat credit was availed for inputs used in the manufacture of branded goods cleared on full payment of duty. Conclusion: The Tribunal concluded that the authorities below erred in applying the decision in Ramesh Food Products to the present case and in denying the benefit of SSI exemption to the goods to which the notification applied. The impugned orders were set aside, and the appeals were allowed with consequential relief.
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