2012 (11) TMI 24 - AT - Central Excise

SSI Exemption - Whether branded goods should be clubbed with unbranded goods for the purpose of implementation of mandate of Notification No. 8/02 Held that - Branded goods when differentiated from unbranded goods both are not in equal footing - In no uncertain terms it has been stated in the notification that branded goods should be excluded from computation of SSI limit - there are branded and unbranded goods manufactured by the respondent, SSI benefit claimed by the respondent should not be denied - Revenue s appeal is dismissed.

Summary

Issues:
Interpretation of Notification No. 8/02 for clubbing branded and unbranded goods, quantum of branded goods manufactured, distinction between branded and unbranded goods, exclusion of branded goods from SSI exemption computation.

Analysis:
The judgment revolves around the interpretation of Notification No. 8/02 concerning the treatment of branded and unbranded goods for the purpose of SSI exemption. The Revenue contended that branded goods should be clubbed with unbranded goods, while the appellate authority disagreed, stating that both types of goods are not on equal footing. The authority allowed the benefit of the notification to the appellant for unbranded goods, which the appellant claimed had incurred duties due to branded goods. The key issue here is the differentiation between branded and unbranded goods for the application of the notification.

The Revenue argued that the appellant failed to demonstrate the quantity of branded goods manufactured, emphasizing the necessity of proper adjudication through a show cause notice. The appellant's consultant countered this by pointing out that the show cause notice itself highlighted the distinction between branded and unbranded goods, indicating that the appellant produced two different products with varying values, as disclosed in the ER-1 return. This distinction was crucial in determining the eligibility for SSI exemption under the notification.

The Tribunal examined the records and confirmed that the appellant indeed manufactured both branded and unbranded goods, with the branded goods identified as 'ORIENT'. Referring to the relevant notification, the Tribunal emphasized that branded goods should be excluded from the computation of the SSI limit, as explicitly stated in the notification. Drawing a parallel to a Supreme Court decision involving different branded goods, the Tribunal concluded that when the law clearly distinguishes between goods, they should be treated separately, which was not the case in the Revenue's appeal.

Ultimately, the Tribunal upheld the first appellate order, dismissing the Revenue's appeal, as there was no legal flaw in granting the SSI benefit to the appellant, considering the distinct production of branded and unbranded goods. The judgment underscores the importance of accurately differentiating between branded and unbranded goods in determining eligibility for tax exemptions and benefits under relevant notifications.