2013 (11) TMI 690 - AT - Central Excise

SSI Exemption - Benefit of Notification No.8/2003 Medicaments cleared without payment of duty bearing the brand name of the appellant-company - COMMISSIONER OF C. EX., AHMEDABAD Versus RAMESH FOOD PRODUCTS 2004 (11) TMI 103 - SUPREME COURT OF INDIA to be followed or not Held that - A judgement has to be understood as to what it decides and the facts in which the decision is taken - The ratio cannot be culled out ignoring the facts of the case - The pre-condition for availing the benefit of the Notification No.175/86 is abundantly clear that the manufacturer was given clear option to choose between the two benefits, one under the notification and another under the Modvat Scheme and not to avail both the benefits simultaneously - that is not the case under Notification No.8/2003-CE - there is no such restriction imposed under the said notification. Plain reading of Clause 3, 3A and 4 of the notification would disclose that the manufacturers are not debarred form availing the benefit under the said notification in relation to the goods other than the goods which are excluded from the benefit of the said notification while simultaneously seeking to avail the benefit of Cenvat credit or Modvat credit in relation to such excluded goods provided they are cleared on payment of full duty Decided in favour of Assessee.

Summary

Issues:
1. Interpretation of Notification No.8/2003-CE dated 1.3.2003 regarding duty payment on pharmaceutical products.
2. Application of Modvat Scheme and Cenvat credit in relation to exempted and non-exempted goods.
3. Comparison of the ruling in Ramesh Food Products case with the present case.
4. Consideration of the Tribunal's order dated 28.04.2010 in the appellant's own case.
5. Compliance with the pre-conditions of Notification No.175/86-CE dated 1.3.86.

Issue 1 - Interpretation of Notification No.8/2003-CE dated 1.3.2003:
The appellant, engaged in manufacturing pharmaceutical products, claimed duty exemption under the notification for goods bearing their brand name. However, they sought Cenvat credit for duty paid on inputs used in manufacturing goods under another brand name. The Tribunal analyzed the notification's provisions and held that manufacturers were not prohibited from availing benefits under the notification while also claiming Cenvat credit for excluded goods cleared with full duty payment. This interpretation was crucial in determining the appellant's duty liability.

Issue 2 - Application of Modvat Scheme and Cenvat credit:
The Tribunal highlighted the differences between the Modvat Scheme and Cenvat credit rules. It emphasized that under Notification No.175/86-CE dated 1.3.86, manufacturers had to choose between Modvat benefits and other benefits, not availing both simultaneously. In contrast, the Tribunal noted that Notification No.8/2003-CE dated 1.3.2003 did not impose such restrictions. Manufacturers could claim benefits under this notification for certain goods while also availing Cenvat credit for excluded goods cleared with full duty payment.

Issue 3 - Comparison with Ramesh Food Products case:
The appellant cited a previous judgment in their own case where the Tribunal distinguished the Ramesh Food Products case, leading to a favorable decision. The Tribunal found consistency in applying this distinction to the present appeal, indicating that the appellant's argument aligns with the legal interpretation adopted in their previous case.

Issue 4 - Consideration of Tribunal's order dated 28.04.2010:
The Tribunal referenced its order dated 28.04.2010 in the appellant's previous case to support the decision in the present appeal. Since this order was neither stayed nor reversed by a higher court, the Tribunal found it relevant to the current matter, providing a basis for allowing the appeal and waiving the pre-deposit requirement.

Issue 5 - Compliance with pre-conditions of Notification No.175/86-CE dated 1.3.86:
The Tribunal emphasized the importance of understanding the pre-conditions set forth in Notification No.175/86-CE dated 1.3.86 in light of the Ramesh Food Products case. It clarified that the manufacturer's choice between benefits under this notification and the Modvat Scheme was distinct from the flexibility offered by Notification No.8/2003-CE dated 1.3.2003. By analyzing these pre-conditions, the Tribunal justified its decision to allow the appeal and grant the relief claimed by the appellant.

This comprehensive analysis of the judgment delves into the interpretation of relevant notifications, the application of legal principles, and the comparison with previous cases to provide a thorough understanding of the issues addressed and the Tribunal's decision-making process.