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2018 (3) TMI 392 - AT - Central ExciseSSI Exemption - N/N. 8/2003-CE - since there is no one-to-one co-relation between the inputs and final products under Modvat scheme, hence it is not possible to allow the manufacturer to simultaneously avail modvat on some products and avail exemption on some other products under small scale exemption scheme - Held that - Hon ble Supreme Court judgment in the case of Nebulae Health Care Ltd 2015 (11) TMI 95 - SUPREME COURT , wherein it was held that if Cenvat credit is availed in respect of goods manufactured for others and not on goods manufactured on own account and once excise duty is paid on the goods manufactured for others the SSI unit is entitled to avail benefit of SSI exemption on the goods manufactured on own account. Once the assessee is maintaining separate records and is not availing availing credit on inputs used for the production of goods, which are cleared under N/N. 8/2003-CE dt. 1.3.2003, they are eligible to claim exemption under the said notification. The Appellant is eligible for the benefit of SSI exemption and the demands are not sustainable - appeal allowed - decided in favor of appellant.
Issues:
1. Eligibility for SSI exemption under Notification No.8/2003-CE. 2. Interpretation of rules regarding availing credit on inputs under Notification No.8/2003-CE. 3. Application of judgments in similar cases to determine eligibility for exemption. Analysis: Issue 1: Eligibility for SSI exemption under Notification No.8/2003-CE The case involved the Appellants engaged in manufacturing Plastic Containers and lids under their own brand name and other branded goods. The Appellants availed the SSI exemption under Notification No.8/2003-CE on clearances made under their brand name but paid duty on clearances made under another brand. The dispute arose when the Revenue demanded duty on the Appellant's own branded goods, claiming the SSI exemption was not applicable due to availing cenvat credit on inputs. The adjudicating authority initially dropped the demand, but the Commissioner (Appeals) held that the Appellant was not eligible for exemption if credit on input was availed. The Appellant appealed against this decision. Issue 2: Interpretation of rules regarding availing credit on inputs under Notification No.8/2003-CE The Appellant argued that they maintained separate records for raw materials used in different brand goods and only availed credit on inputs used for the manufacture of dutiable goods. They contended that since a clear correlation existed between inputs and final products, exemption should not have been denied. The Appellant cited Circular No.59/88-CE.8 to support their case. They also distinguished the judgment of M/s Ramesh Food Products, stating its inapplicability to the present case governed by Notification No.8/2003-CE. The Appellant relied on precedents like Stanlek Engineering Pvt Ltd and Chaitanya Power Capacitors Pvt Ltd to strengthen their argument. Issue 3: Application of judgments in similar cases to determine eligibility for exemption The Tribunal examined the records and submissions, noting that the Appellant maintained separate records for inputs and only availed credit on inputs used for goods under other brands. Citing the judgment in Nebulae Health Care Ltd, the Tribunal held that if Cenvat credit was not availed on goods manufactured for own account, the SSI unit could claim exemption. The Tribunal referenced similar cases like Stanlek Eng. P. Ltd and Faridabad Tools Ltd to support their decision. Consequently, the Tribunal set aside the impugned order and allowed the appeal, granting the Appellant the benefit of SSI exemption. This detailed analysis of the judgment highlights the issues, arguments presented, legal interpretations, and the final decision rendered by the Tribunal.
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