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TMI Blog2019 (12) TMI 278X X X X Extracts X X X X X X X X Extracts X X X X ..... analyzing the principles laid down in earlier judgments including that in Ramesh Food Products case [ 2004 (11) TMI 103 - SUPREME COURT ] - In the said judgment, the Hon'ble Supreme Court distinguished the ratio laid down in Ramesh Food s case (supra) and held that an assessee can avail the SSI benefit and also CENVAT credit on inputs used in the manufacture of Branded goods cleared on payment of duty. Besides, Notification No. 8/2003-CE dated 1.3.2003 has been amended w.e.f. 11.2.2009 vide Notification No. 2/2009-CE dated 11.2.2009 incorporating the following proviso to clause (iii) of condition (2) of the said notification. The opinion of learned Member (Judicial) is agreed upon that the appellants are entitled to avail benefit of SSI exemption N/N. 8/2003-CE dated 1.3.2003 even though they have admittedly availed CENVAT Credit on inputs which have been used in the manufacture of branded goods, cleared on payment of duty during the relevant period. - Hon ble Mrs. Archana Wadhwa, Member (Judicial) And Hon ble Mr. Sanjiv Srivastava, Member (Technical) Shri Manoj Deshpande, C.A., for appellant Shri M.R. Melvin, Superintendent (AR), for respondent ORDER Per: Sanjiv Srivastava ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Superintendent Authorized Representative for the revenue. 3.2 Arguing for the Appellant learned CA submitted that tribunal has in case of Cure Quick Remedies P Ltd vs Commissioner of Central Excise, Panchkula {2010 (255) ELT 249 (T-Del)] held that such simultaneous availment of SSI exemption under notification No 8/2003 and CENVAT Credit in respect of the inputs used in manufacture of the goods cleared on payment of duty is permissible. Hence following the said decision his appeal should be allowed. 3.3 On the contrary learned Authorized Representative submitted that this bench of Tribunal has in case of Warna Packaging Pvt Ltd, vs Commissioner of Central Excise, Pune II [2017 (347) ELT 638 (T-Mum)] has held that such simultaneous availment of benefit of CENVAT Credit and exemption under notification is not permissible. Similar view has been expressed by the Ahmedabad bench in case of Synthetic Industries [2016 (344) ELT 1044 (T-Ahmd) and delhi bench in case of U P Engineering Corporation [2010 (261) ELT 888 (T-Del)]. In view of the said decisions he sought dismissal of the appeals. 4.1 We have considered the submissions made by both the sides. The issue for consideration is whet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion in his case shall apply to the aggregate value of clearances mentioned against each of the serial numbers in the said Table and not separately for each factory; (vi) where the specified goods are cleared by one or more manufacturers from a factory, the exemption shall apply to the aggregate value of clearances mentioned against each of the serial numbers in the said Table and not separately for each manufacturer; (vii) the aggregate value of clearances of all excisable goods for home consumption by a manufacturer from one or more factories, or from a factory by one or more manufacturers, does not exceed rupees four hundred lakhs in the preceding financial year. 4.3 Hon ble tribunal in case of Cure Quick Remedies P Ltd, supra held as follows: 7. In all these matters, the period involved is from October, 2005 to September, 2006. During the relevant period, the Notification No. 8/2003-C.E., dated 1-3-2003, as amended, which was in force, and the same clearly provided under Clause 3A(b) that for the purposes of determining the aggregate value of the clearances of all excisable goods for home consumption, the clearances bearing the brand name or the trade name of another person, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elation to the branded specified goods and simultaneous manufacture of non-branded specified goods even in a situation where Cenvat credit is sought to be availed in respect of the duty paid on the inputs utilised in the branded specified goods, whereas the SSI exemption is sought to be availed in relation to the other goods, finds support from various decisions sought to be relied upon by the ld. Advocate for the appellants. The decisions include in the matters of Spring Klein Aqua Pvt. Ltd., Mepro Pharmaceuticals P. Ltd., CRI Pumps (P) Ltd., Stanlek Engineering P. Ltd. and Nebulae Health Care Ltd. (supra). 10. In Ramesh Food Product s case, the Apex Court was dealing with the matter wherein the assessee was engaged in the manufacture of biscuits under the brand name of Ramesh on his own account and under the brand name of Cadbury on job work basis on behalf of M/s. Hindustan Cocoa Products, Bombay. The assessee cleared his own products while availing the benefit of Notification No. 175/86-C.E., dated 1-3-86 and simultaneously sought to avail Modvat benefit in respect of Cadbury brand biscuits manufactured by it on job work basis. A show cause notice came to be issued to him for r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it of Modvat Scheme and forego the other benefits or in case, the manufacturer decides to avail the other benefits than to forego the benefit of Modvat Scheme. Besides, it is also to be noted that Notification No. 175/86-C.E., dated 1-3- 86 itself in the preamble clearly provided that in case the assessee choose to opt for the benefit of Modvat Scheme, he would not be a entitled for the benefit under scheme and he will have to pay the amount calculated @ 10% Ad valorem of the value of the products cleared. It was in the background of those facts that the ruling of the Apex court in Ramesh Food Products has to be understood. It is settled law that the ratio of a decision cannot be understood unless one takes into account the facts of the case and the point which arises for consideration in the matter and the decision thereon. 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. Taking into consideration the facts of the matter in Ramesh Food Products case and bearing in mind, the pre-condition for availing the benefit of the Notification no. 175/86-C.E., dated 1-3-86, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... simultaneously availed the exemption under Notification No. 8/2003-C.E. as well as Cenvat credit scheme which is not permissible as rightly held by the lower authority. The plea of appellant that they have not availed credit of duty paid on inputs up to 29-10-2006 used in the manufacture of any specified/non-specified goods is not acceptable as the appellant himself committed that they have utilised the credit during transitional period. Further, the appellant has not put on record that they have maintained a separate stock which remains unutilised up to the aggregate value of first clearance of Rs. one crore during the financial year 2006-07 as argued. Therefore, I find that, there is force in findings of the lower authority in confirming the demand within the provisions of Central Excise Rules Notification. The Order passed by the lower authority is therefore, liable to be upheld. 5. The condition (iii) of Para 2 of the said notification is very specific and the reason/cause behind its non-fulfilment, in our opinion is irrelevant. Accordingly, we do not see any reason to interfere with the findings of the learned Commissioner (Appeals). 4.5 In case of Commissioner of Customs (Im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... infirmity in the order of Commissioner (Appeals). 5.0 The appeal filed by the Appellant is dismissed. (Pronounced in court on ___.10.2018) (Archana Wadhwa) Member (Judicial) (Sanjiv Srivastava) Member (Technical) Per: Archana Wadhwa After going through the order proposed by my learned brother, Member (Technical), I find myself in disagreement with the same and as such I proceed to record a separate order. 2. There is no dispute about the factual position, which stands recorded by my learned brother. The appellant was engaged in the manufacture of its own goods, which were being cleared by him without payment of duty, after availing the SSI Exemption Notification No.8/2003-Central Excise dated 01.03.2003, inasmuch as the same is applicable to the branded goods. He was also manufacturing the goods under the brand name of others, which were being cleared by him on payment of duty, after availing the benefit of cenvat credit, as required in terms of the said notification. The issue which arises is as to whether the appellant can avail the benefit of the notification in question in respect of his own goods, without the claim of cenvat credit and can claim the credit of duty paid on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e notification a manufacturer is entitled to avail the exemption in respect of the first clearances up to a particular value of its own manufactured goods and is required to pay duty in respect of the branded goods right from the beginning. As such, it can be concluded that the claim of clearances in terms of the said notification is exempted in respect of own manufactured goods up to a value of Rupees one crore and payment of duty in respect of the branded goods is required right from the first clearance itself. As such payment of duty on the branded goods, by a manufacturer, who is manufacturing both the types of goods is not on account of any option to be exercised by the manufacturer but is by way of a legal obligation imposed upon him. Further, when the duty is required to be discharged on the specified goods, the manufacturer is entitled to avail the credit in terms of the Cenvat Credit Rules, in respect of the inputs used in the said branded goods. 4. In the above scenario the question which arises is as to whether the same amounts to simultaneous availment of notification as also the cenvat credit. In my views, it is not simultaneous availment of exemption as also the credi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y after the availment of credit, according to the interpretation adopted by the Lower Authorities, he would not be entitled to avail the small scale exemption benefit in respect of the goods up to ₹ 95 lakhs. Such an interpretation adopted by the Authorities below would lead to an anomaly and two different benefits to two different manufacturers, which are otherwise similarly situate i.e. both of them are SSI unit and otherwise are entitled to the benefit of the Notification. The fact that the manufacturer has an option to either clear the goods at nil rate of duty or to pay a normal rate of duty right from the beginning, reflects upon the fact that the clearance of branded goods which have to be legally made on payment of duty has got nothing to do with the assessee s own manufactured goods. Further, the clause 3(a) which requires that the clearances of branded goods shall not be taken into account for the purpose of determining the aggregate clearance of goods for home consumption also reflects upon the facts that a manufacturer can claim the exemption in respect of the goods cleared for home consumption separately and the branded goods clearances is not required to be adde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c Industries are altogether different from the facts of the present case. There was no manufacture of any branded goods in the case of M/s Synthetic Industries and as such according to me the ratio of the said decision is not applicable. Further reference and reliance on the decision in the case M/s Warana Packaging Pvt. Ltd. V/s Commissioner of Central Excise, Pune-II reported at 2017 (347) E.L.T. 638 (Tri.-Mumbai) is also not applicable. The said decision also deals with a situation where the assessee was availing the benefit of the notification as also of the cenvat credit in respect of his own manufactured goods, though cleared to two different customers. In respect of clearance of goods one customers, he was availing the credit and in respect of clearance of goods to the other customers, he was claiming exemption. It was in this scenario the Tribunal held that such simultaneous benefits could not be availed under the notification. There is nothing in the said notification to show that the disputed issue related to the applicability of the notification in respect of the own manufactured goods and clearances of branded goods, inasmuch as the assessee was not even manufacturing a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anufactured excisable goods on their own behalf and also manufactured on behalf of others, by affixing the brand name belonging to others. They have availed SSI exemption under Notification No. 8/2003-CE dated 1.3.2003 for clearance of their own manufactured goods, whereas they paid duty on the goods manufactured for other parties affixing the brand name, after availing CENVAT Credit of the inputs used in the manufacture of branded goods. The Department proposed to deny the benefit of SSI exemption for clearance of their own goods alleging that since they availed CENVAT Credit on inputs used in the manufacture of branded goods, hence, fall outside the scope of the said notification. The learned Member (Technical) referring to the judgment of the Hon'ble Supreme Court in the case of Commissioner of Central Excise, Ahemdabad Vs. Ramesh Food Products 2004 (174) ELT 310 (SC) and other judgments opined that the appellant are not eligible to avail benefit of exemption under Notification No. 8/2003-CE dated 1.3.2003 since they had availed CENVAT Credit on inputs which were used in the manufacture of branded goods cleared on payment of duty. Learned Member (Judicial), on the other hand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nter alia, provides that the clearances bearing the brand name or trade name of third parties which are ineligible for grant of this exemption, for the purposes of determining aggregate value of clearances for home consumption, are not to be included. These Notifications also make it clear that the exemption contained therein is not to apply to the specified goods bearing a brand name or trade name, whether registered or not, of any person, except under certain circumstances specifically stipulated therein. The Notifications also clarify that for the purpose of these Notifications, where the goods manufactured by a manufacturer bear brand name or trade name (whether registered or not) of any manufacturer of trade, they shall not be deemed to have been manufactured by such other manufacturer or trade. Reading of the aforesaid provisions in the Notifications unambiguously points out that for the purposes of availing the benefit of Notification by an SSI Unit, the clearances for home consumption only are to be taken into consideration, except in those cases where it is clearly provided otherwise. For this purpose, clearances bearing the brand name or trade name of third parties are co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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