2005 (9) TMI 185 - AT - Central Excise

Summary

Issues:
1. Classification of 'cookies' under Central Excise Tariff Act.
2. Eligibility for Small Scale Industry (SSI) exemption.
3. Claim of CENVAT credit and applicability of relevant notifications.

Analysis:

Issue 1: Classification of 'cookies' under Central Excise Tariff Act
The case involved the classification of 'cookies' manufactured by the assessee under the Central Excise Tariff Act. The department contended that the 'cookies' should be classified as biscuits under SH 1905.11, thus making them ineligible for Small Scale Industry (SSI) exemption. The Commissioner confirmed a partial demand of duty against the assessee. However, the Tribunal found that the 'cookies' were distinct from biscuits and upheld the SSI exemption for the unbranded cookies sold by the assessee, citing relevant case laws to support their decision.

Issue 2: Eligibility for Small Scale Industry (SSI) exemption
The Revenue appealed against the dropping of a significant portion of the demand raised in the show-cause notice, arguing that unbranded 'cookies' sold by the assessee were not eligible for SSI exemption. The Revenue claimed that the relation between the product and the brand-name owner was established through the billing process, thus disqualifying the cookies from the exemption. However, the Tribunal, drawing parallels from previous cases, held that the mere presence of the brand name on the bills did not make the goods branded, and thus, the SSI benefit was rightfully allowed to the assessee for the unbranded cookies sold at their outlets for immediate consumption.

Issue 3: Claim of CENVAT credit and applicability of relevant notifications
The assessee contested the demand of duty confirmed by the adjudicating authority, specifically challenging the applicability of Notification No. 9/2002 and claiming entitlement under Notification No. 8/2002. The Tribunal noted that the assessee had not availed the CENVAT credit on duty-paid inputs, leading to a remand for verification of the unutilized credit. The Tribunal set aside the part of the order against the assessee, allowing their appeal by remand for further consideration by the Commissioner to determine the applicability of the relevant notifications.

In conclusion, the Tribunal's judgment clarified the classification of 'cookies', upheld the SSI exemption for unbranded cookies, and directed a remand for verification of CENVAT credit and consideration of alternative pleas under relevant notifications.