2007 (9) TMI 169 - AT - Central Excise

SSI unit mfg. both own brand goods and branded goods of another Separate accounts maintained No evidence to prove that assessee availed input credit in respect of input used for SSI exempted goods No justification to deny credit Revenue s appeal fails.

Summary

Issues: Revenue's challenge to relief granted by ld. Commissioner (Appeals) regarding SSI exemption and Modvat credit, imposition of penalty.

The ld. Appellate Authority held that the Respondent did not avail credit of input used in the manufacture of exempted goods for which SSI exemption was not deniable in respect of its own branded goods. He also noted that goods manufactured with the brand of others were outside the purview of SSI exemption. The Authority found that the Respondent had not simultaneously availed Modvat credit on the input used for goods manufactured to avail SSI benefit and SSI exemption. Consequently, it was concluded that the Respondent was not liable to the duty demanded, and the imposition of penalty was deemed unnecessary.

The JDR for the Revenue argued that simultaneous availment of both Modvat credit and SSI exemption was impermissible for the Respondent, citing Board's Circular No. 9/93-CX.8. Additionally, reference was made to a Supreme Court judgment and it was asserted that the Respondent was rightly dealt with by the Adjudicating Authority for two types of manufacture - products carrying own brand name and those carrying another brand name. It was contended that the Respondent was not entitled to SSI exemption as per the Circular.

The Consultant for the Respondent argued that the ld. Appellate Authority, without finding any legal infirmity, had correctly allowed the Respondent's appeal. It was emphasized that separate accounts were maintained for own brand goods and branded goods of another, with inputs recorded separately for each. The Consultant highlighted that there was no evidence of Modvat credit availed for SSI exempted goods, and that the factual matrix did not suggest any abuse of Modvat credit. The Consultant further pointed out that a specific Notification did not deprive the Respondent of SSI benefit, and as there was no legal bar, the Respondent should not be disentitled to the relief due.

After hearing arguments from both sides, it was established that the Respondent was an SSI manufacturer of both own brand goods and branded goods of another, with separate accounts maintained for each type of goods and their respective inputs. No evidence was presented to prove that the Respondent availed input credit for SSI exempted goods while claiming SSI exemption. The absence of such evidence led to the conclusion that the Appellate Authority's decision was appropriate and there was no basis for intervention. Consequently, the Revenue's appeal was dismissed.