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2017 (6) TMI 271 - AT - Central ExciseSSI exemption - denial of benefit of exemption N/N. 8/2003-CE dated 01/03/2003 - denial on the ground that the appellant have availed CENVAT credit of duty paid on inputs in respect of one unit and whereas in another unit they have availed SSI exemption and cleared goods without payment of duty - Held that - the respondents had manufactured and cleared gods both for export as well as for domestic use. There can be no dispute regarding treatment of export goods and the credit available to such manufacture - Regarding domestic clearances, we find that clearances with brand name of another person are not within the ambit of the SSI notification - the credit availed for manufacture of goods with other s brand name as well as for export is of no consequence, to decide the eligibility of the respondent in respect of domestic clearances in terms of the said notification. The Hon ble Supreme Court in CCE, Chennai vs. Nebulae Health Care Ltd. 2015 (11) TMI 95 - SUPREME COURT , held that Availment of such credit will not disentitle the SSI units, the exemption for goods manufactured on their own account. Appeal dismissed - decided against Revenue.
Issues: Eligibility of exemption under Notification 8/2003-CE for manufacturing units producing excisable items with own and others' brand names, simultaneous availment of SSI exemption and Cenvat credit, validity of relying on previous tribunal decisions, verification of turnover for exemption eligibility.
In this case, the main issue revolved around the eligibility of the respondent to avail exemption under Notification 8/2003-CE dated 01/03/2003. The dispute arose as the Revenue contended that the appellants were not entitled to the exemption meant for small scale units. The Revenue argued that the respondent had availed Cenvat credit for one unit and SSI exemption for another, leading to the initiation of proceedings to recover unpaid Central Excise duty amounting to ?14,16,647 for the period 2006-2007. The Original Authority upheld the demand and imposed a penalty, which was later set aside by the Commissioner (Appeals) who ruled that SSI exemption cannot be denied based solely on availing Cenvat credit for duty payment in one unit. The Revenue, aggrieved by the Commissioner's decision, filed an appeal arguing that the respondent cannot simultaneously benefit from SSI exemption in one unit while taking Cenvat credit and paying duty in another. The Revenue also contended that the reliance on a previous Tribunal decision in Kinjal Electricals Pvt. Ltd. case was no longer valid as it had been overturned by the Supreme Court in Universal Drinks Pvt. Ltd. case. The respondent's counsel countered the Revenue's arguments by stating that they had different types of clearances for excisable goods, including exports, domestic clearances with others' brand names, and domestic clearances with their own brand name. They clarified that they had only availed Cenvat credit for inputs used in goods manufactured with others' brand names and meant for export. The counsel emphasized that clearances with others' brand names were outside the purview of the exemption notification, and their turnover was within permissible limits for both domestic clearances without others' brand names and preceding years. Upon hearing both sides, the Tribunal found that clearances with others' brand names did not fall under the SSI notification, requiring duty payment at applicable rates. The Tribunal emphasized that the credit availed for manufacturing goods with others' brand names or for export did not impact the eligibility for SSI exemption concerning domestic clearances. The Tribunal highlighted the Supreme Court's ruling in CCE, Chennai vs. Nebulae Health Care Ltd., which clarified that manufacturing goods under others' brand names did not qualify for SSI exemption, and excise duty paid on such goods entitled SSI units to credit without affecting the exemption for goods manufactured under their own account. Consequently, the Tribunal dismissed the Revenue's appeal, directing the Jurisdictional officer to re-verify the turnover for exemption eligibility as per the impugned order. The judgment emphasized that the availed credit for goods with others' brand names or exports did not impact the SSI exemption eligibility for goods manufactured under the respondent's brand name.
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