2017 (1) TMI 1279 - AT - Central Excise

Benefit of N/N. 8/2003-CE dated 01.03.2003 - SSI exemption - use of brand name of others - Held that - although the appellant is manufacturing of branded goods for others and availing cenvat credit on inputs used in manufacturing of branded good for others which have been cleared on payment of duty, the appellant is entitled for benefit of Notification No. 8/2003-CE dated 01.03.2003 for their own manufactured goods. The issue is no more res integra, as decided in the case of League Laboratories Ltd. 2016 (8) TMI 117 - CESTAT CHANDIGARH where it was held that the goods cleared by the appellant for home consumption, as no availed cenvat credit. Therefore, by following the decision of Hon ble Apex Court in the case of Nabulae Health Care Ltd. 2015 (11) TMI 95 - SUPREME COURT wherein the Hon ble Apex Court has held that the assessee is entitled to benefit of exemption notification 8/2003-CE dated 01.03.2003, the impugned order is set aside and the appellant is entitled to the benefit of N/N. 8/2003-CE. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Denial of benefit of Notification No. 8/2003-CE dated 01.03.2003
- Availing cenvat credit on inputs for manufacturing branded goods
- Exemption under Notification No. 8/2003-CE for own manufactured goods
- Interpretation of conditions for availing exemption under the notification

Analysis:
The appellant appealed against an order demanding duty, interest, and penalty due to the denial of the benefit of Notification No. 8/2003-CE dated 01.03.2003. The appellant, engaged in manufacturing P & P Medicaments, availed cenvat credit on inputs for manufacturing branded goods for others. However, they cleared their own manufactured goods under the exemption of the said notification. The impugned order was issued for the period 2005-2007, stating that since the appellant availed cenvat credit on inputs for branded goods, they were not entitled to the notification's benefit. The issue revolved around the denial of this exemption and the subsequent duty, interest, and penalty imposed on the appellant.

The Tribunal considered the precedent set by the Apex Court in Nebulae Health Care Ltd. and League Laboratories Ltd. cases. In the League Laboratories Ltd. case, it was observed that the appellant, engaged in manufacturing medicines under their own and others' brand names, availed exemptions under Notification No. 8/2003-CE for their own brand goods. However, the Revenue contended that as the appellant utilized cenvat credit on inputs before the aggregate value of clearance exceeded a certain limit, they were not entitled to the exemption. The Revenue relied on the Ramesh Food Product case and issued a show cause notice, leading to the appellant's appeal. The Tribunal, following the Nebulae Health Care Ltd. case, held that despite manufacturing branded goods for others and availing cenvat credit, the appellant was entitled to the Notification No. 8/2003-CE benefit for their own manufactured goods.

The Tribunal's decision was based on the interpretation of the conditions specified in the notification for availing the exemption. The Tribunal highlighted relevant explanations from the notification, emphasizing that the appellant, by manufacturing branded goods for others and availing cenvat credit, did not disqualify them from claiming the exemption for their own manufactured goods. Therefore, the impugned order was set aside, and the appeal was allowed with any consequential relief. The judgment clarified the eligibility criteria under the notification and the appellant's entitlement to the exemption despite availing cenvat credit for branded goods.