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2017 (5) TMI 31 - AT - Central ExciseSSI exemption - turnover exceeding threshold limit - denial of N/N. 8/2003-CE dated 1.3.2003 on the ground that the total value of clearances exceeded ₹ 300 lakhs/Rs.400 lakhs during the financial year 2002-03, 2003-04 and 2004-05 - inclusion of clearance bearing brand name of others - Held that - similar issue came up before this Tribunal in the case of Savotham Care Limited 2015 (11) TMI 244 - CESTAT BANGALORE , where it was held that SSI exemption Notification No.8/93, dated 10-3-2003 provides that clearances bearing the brand name or trade name of another person, who are ineligible for the grant of this exemption in terms of Paragraph 4 shall not be taken into account for determining the aggregate value of clearances of all excisable goods for home consumption. It is clear that to determine aggregate value of clearances of excisable goods for home consumption and clearances bearing the brand name or trade name of another person, which are ineligible for the grant of this notification in terms of para 4 are not to be included - if the clearances bearing the brand name or trade name of another person, are excluded from the turnover, the same will be within the exemption limit. The assessee is entitled to SSI exemption - appeal allowed - decided in favor of appellant.
Issues Involved:
1. Eligibility for SSI exemption under Notification No. 8/2003-CE. 2. Inclusion of clearances of exempted goods in the aggregate value of clearances. 3. Entitlement to Cenvat credit on inputs used in the manufacture of exempted goods. Detailed Analysis: 1. Eligibility for SSI Exemption: The primary issue revolves around whether the assessee is entitled to the SSI exemption under Notification No. 8/2003-CE, given that their goods bear the brand name of another person. The assessee argues that their goods, such as calendars, posters, and diaries, are branded with the names of their buyers, and thus, should be excluded from the aggregate value of clearances as per para 3A(b) and para 4 of the notification. The Tribunal referenced the case of Savotham Care Limited, which clarified that clearances bearing the brand name of another person, which are ineligible for exemption under para 4, should not be included in the aggregate value of clearances. The Tribunal agreed with the assessee’s interpretation, noting that the notification's wording should be followed precisely without inferring additional distinctions not explicitly stated. 2. Inclusion of Clearances of Exempted Goods: The Revenue's contention was that the total value of clearances should include the clearances of exempted goods, thereby exceeding the threshold limits for SSI exemption. The Tribunal, however, referenced previous decisions, including Roots Multiclean Ltd., which established that the value of clearances bearing the brand name of another person should be excluded when calculating the aggregate value for SSI exemption. The Tribunal emphasized that the notification does not distinguish between exempted goods and dutiable goods for this purpose, and thus, the clearances bearing another's brand name should not be included in the aggregate value. 3. Entitlement to Cenvat Credit: The Commissioner (Appeals) had allowed the benefit of Cenvat credit to the assessee, which the Revenue contested, arguing that the assessee should not be entitled to take credit on inputs used in the manufacture of exempted goods. The Tribunal, however, did not find merit in the Revenue's argument and upheld the decision to allow Cenvat credit, aligning with the precedent that clearances bearing another’s brand name, which are ineligible for exemption, should not be included in the aggregate value of clearances. Conclusion: The Tribunal concluded that the assessee is entitled to SSI exemption as the clearances bearing the brand name of another person should be excluded from the aggregate value of clearances. Consequently, the appeal filed by the assessee was allowed, and the appeal filed by the Revenue was dismissed. The Tribunal's decision was based on the precise wording of the notification and supported by previous judgments, ensuring that the clearances of branded goods are not included in the aggregate value for determining SSI exemption eligibility.
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