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Commissioner of Central Excise, Pondicherry Versus Shrushthi Plastics (P) Ltd.

2015 (11) TMI 316 - CESTAT CHENNAI

Simultaneous availment of SSI exemption and modvat credit - Held that:- As per Notfn 8/99 as amended for the purpose of determining the aggregate value of clearances by a manufacturer, the clearance value of goods bearing the brand name of other persons are excluded. On the identical issue, in the case of Nebulae Health Care Ltd. Vs CC Chennai (2006 (8) TMI 74 - CESTAT, CHENNAI), this Tribunal after taking into consideration the Supreme Court judgement in the case of Commissioner Vs Ramesh Food .....

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tly paid excise duty on the goods bearing the brand name of 'HLL" and accordingly filed declaration to avail Modvat credit on the inputs used in the manufacture of branded goods belonging to another person which is outside the scope of SSI exemption under Notfn 8/99. - respondents are eligible for Modvat credit on the inputs used in the manufacture of goods bearing the brand name of "HLL" - Decided against Revenue. - Appeal No.E/429/2003 - FINAL ORDER No.41505/2015 - Dated:- 3-11-2015 - Shri R. .....

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of others. The adjudicating authority in his order dt. 25.10.2015 dropped the proceedings. Against this, Revenue preferred appeal before Commissioner (Appeals). The LAA dismissed Revenue's appeal and upheld the order of lower authority. Aggrieved by the order of Commissioner (Appeals), Revenue filed the present appeal before Tribunal. This Tribunal in the first round of litigation, vide Final Order No.65/12 dt. 30.1.2012 allowed the Revenue's appeal confirming the demand to the extent o .....

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cordingly, the appeal is restored and taken up for hearing. 3. The Ld. A.R for the Revenue reiterated the grounds of appeal and submits that as per the erstwhile rules, assessee cannot avail both SSI exemption as well as Modvat credit and submits that in the case of Nebulae Health Care Ltd.,this Tribunal has relied Tribunal's decision in Faridabad Tools Pvt. Ltd. Vs Collector 1993 (63) ELT 759 (Tribunal) which was overruled by the Supreme Court in the case of Ramesh Food Products (supra). Sh .....

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asis bearing the brand name of "Hindustan Lever Ltd. (HLL)". Accordingly, they paid excise duty on the branded goods pertaining to HLL and also filed necessary declaration before the adjudicating authority to avail the Modvat credit on the inputs used in the manufacture of goods bearing the brand name of others on which excise duty has been paid. He submits that no SSI exemption was availed on the branded goods. He submits that adjudicating authority and the appellate authority have co .....

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Hon'ble Supreme Court in their judgement dt. 27.10.2015 dismissed the Revenue civil appeal 2789 of 2007. He produced a copy of the said Supreme Court order and submits that Hon'ble Supreme Court upheld this Bench order and pleaded for rejecting the Revenue appeal. 5. After hearing the submissions of both sides, we find that the issue relates to simultaneous availment of SSI exemption and modvat credit. The adjudicating authority and the appellate authority have clearly discussed the issu .....

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ntical issue, in the case of Nebulae Health Care Ltd. Vs CC Chennai (supra), this Tribunal after taking into consideration the Supreme Court judgement in the case of Commissioner Vs Ramesh Food Products (supra) and the Tribunal's Larger Bench decision in the case of Kamani Foods Vs Collector (supra) allowed the appeal of the assessee. We find that the Revenue preferred appeal against this Tribunal order and the Hon'ble Supreme Court in their order dt. 27.10.2015 in Civil Appeal No.2789/2 .....

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poses 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 .....

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nd name or trade name of third parties are concerned, they are kept outside the scheme inasmuch as: (a) they are not to be included for the purposes of determining the aggregate value of the clearances for home consumption; and (b) such products bearing brand names or trade names of third parties, even if manufactured by the SSI Unit, are not eligible for any exemption and excise duty thereupon has to be paid. Once we understand the scheme of the Notifications in the aforesaid perspective, which .....

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and name whereof belongs to another person, on job work basis, the SSI Unit would be entitled to CENVAT/MODVAT credit on the inputs which were used for manufacture of such goods as on those inputs also excise duty was paid. To put it otherwise, these branded goods manufactured by the SSI Units meant for third parties are regulated by the normal provisions of excise law and will have no bearing or relevance insofar as availing the benefit of those exemption notifications in respect of its own pro .....

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cussion in the impugned judgment dated 22.08.2006 of the Tribunal (which is the subject matter of Civil Appeal No. 2789 of 2007): "7. The provisions in the relevant Notifications to compute aggregate value of clearances mandate that the clearances of goods bearing brand name or trade name of another persons which are ineligible for the grant of exemption shall not be taken into account in determining the aggregate value of clearances. Therefore, value of clearances of goods bearing brand na .....

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rate of duty was prescribed. Goods bearing brand name of third parties are therefore excluded from the exemption in Notification No. 9/2003 as well. The assessee has not availed the benefit contained in either of the Notifications 8/99 and 9/99, 8/2000 and 9/2000 etc. in respect of goods bearing brand name of third parties. 8. We find that the impugned order also seeks support of the ratio of Ramesh Food Products case decided by the Hon'ble Supreme Court. In that case, the Honourable Suprem .....

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not also avail the modvat benefit in respect of certain other specified goods. 8.1 Notfn No. 175/86 dated 01.03.1986 extended concessional rate of duty on first clearances of specified goods of value of rupees seven and half lakhs while availing modvat credit on inputs or full exemptions benefit for such goods without the benefit of modvat credit. The Notfn also provided lesser benefit for further clearances in excess of the above aggregate value under both the options for higher slabs/aggregat .....

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or not) of another manufacturer or traders, such specified goods shall not, merely by reason of that fact, be deemed to have been manufactured by such other manufacturer or trader. 8.2 The above condition though present in the Notifications that replaced the scheme of duty benefit for SS! units contained in Notfn. 175/86, value of such goods are specifically excluded from the computation of aggregate value in these Notfns. Clearances of goods bearing brand name of third parties is thus not gove .....

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le for the grant of this exemption in terms of paragraph 4 below. 4. The exemption contained in the Notification shall not apply to the specified goods bearing a brand name or trade name, whether registered or not, of another person, except in the following cases...." The exclusions mentioned are components manufactured for OE manufacturers, goods manufactured in rural area, goods bearing brand names of KVIC etc. The conditions contained in para 2(iii) of the relevant Notifications seminal .....

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