Whether benefit of SSI exemption 8/2003 is available if Cenvat Credit is taken; SC Judgment in the case of Ramesh Food Products [2004(174) ELT 310] = (2005-TIOL-07-SC-CX). - Central Excise - F. No. 21/1/2006

F. No. 21/1/2006 - CX I Date: 06.10.2006 Government of India Ministry of Finance Department of Revenue Central board of Excise Customs Sub: Whether benefit of SSI exemption 8/2003 is available if Cenvat Credit is taken; SC Judgment in the case of Ramesh Food Products [2004(174) ELT 310] = (2005-TIOL-07-SC-CX). SC has held in the case of Ramesh Food Products [2004(174) ELT 310] = (2005-TIOL-07-SC-CX) that under notification 175/86-CE, dated 1.3.1986, simulataneous availment of full exemption for some products and modvat availment for other products is not permissible. A question has been raised whether in view of the above judgement, Cenvat credit would be available to assesees who for benefit of SSI notfn 8/2003. Please find enclosed a representation of Punjab small Scale Industries Association on this subject. 2. There is another aspect to this issue Para 2 of Notfn. 8/2003 lists conditions/pre-requisites for availment of the benefit of notfn. 8/2003. At para 2(iii), a condition is stated that manufacturer does not avail Cenvat Credit in respect of inputs used in manufacture of specified goods cleared for home consumption. Para 1 of notfn. 8/2003 defines 'specified goods'as "Excisable goods of description specified in the Annexure appended to the notification (hereinafter referred as the specified goods)" Exemption is not available to branded goods under notfn. 8/2003. But branded goods are not explicitly excluded from the definition of 'specified goods'. Therefore it is to be examined whether a manufacturer availing benefit of notfn. 8/2003 can avail Cenvat Credit in respect of inputs used in manufacture of branded goods. 3. I have been directed to request you to send your comments on (i) representation of Punjab Small Scale Industries Association and (ii) the issue mentioned in para 2 above by 15 th October 2006 positively. (Gaurav Sinha) Under Secretary (CX. I)