TMI Blog2018 (12) TMI 1475X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.11.2010 of Commissioner (Appeal) Central Excise Pune-III. By the said order Commissioner (Appeal) upheld the order passed by Assistant Commissioner Central Excise Pune IX Division holding as follows: I confirm Central Excise duty amounting to ₹ 3,88,595/- (Rs Three Lakhs Eighty Eight Thousand Five Hundred and Ninety Five Only) demanded in the impugned show cause notice under section 11A of Central Excise Act, 1944, from M/s Cologicx Systems Ltd. 42, Electronics Cooperative Industrial Estate Pune Satara Road Pune 411009. I also impose penalty of ₹ 5,000/- (Rs Five Thousand only) under rule 27 of the Central Excise Rules, 2002 on M/s Cologicx Systems Ltd. 42, Electronics Cooperative Industrial Estate Pune Satara Road Pune 411009 for violation of Rule 5, 6 and 8 of Central Excise Rules, 2002. I demand interest from M/s Cologicx Systems Ltd. 42, Electronics Cooperative Industrial Estate Pune Satara Road Pune 411009 under section 11AB of the Central Excise Act, 1944 from the date of clearance of the said goods till payment of the duty. This order has been passed without prejudice to any other action which may be taken against the noticee under the Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... puts used in manufacture of dutiable final products viz Branded Goods and SSI exemption under notification No 8/2003=CE dated 01.03.2003 as amended is permissible or not. 4.2 Relevant Para 2 of Notification No 8/2003-CE as it existed during the relevant period i.e. period of demand is reproduced below: 2. The exemption contained in this notification shall apply subject to the following conditions, namely :- (i) a manufacturer has the option not to avail the exemption contained in this notification and instead pay the normal rate of duty on the goods cleared by him. Such option shall be exercised before effecting his first clearances at the normal rate of duty. Such option shall not be withdrawn during the remaining part of the financial year; (ii) while exercising the option under condition (i), the manufacturer shall inform in writing to the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise with a copy to the Superintendent of Central Excise giving the following particulars, namely :- (a) name and address of the manufacturer; (b) location/ locations of factory/ factories; (c) description of inputs used in manufacture of spec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are ineligible for the grant of exemption under the said notification in terms of Clause 4 thereof shall not be taken into account. The relevant portion of the Clause 4 of the Notification provides that the exemption contained in the notification would not apply to the specified goods bearing the brand name or trade name whether registered or not of another person. Clause 1 of the Table to the said notification, which deals with the subject of value of the clearances provided that, first clearance upto an aggregate value not exceeding one hundred lakh rupees made on or after the first day of April in any financial year , shall be liable for nil rate of duty. 8. Perusal of the above provisions of the notification makes it abundantly clear that in case of specified goods bearing brand name or trade name, whether registered or not, of another person being manufactured by the assessee, the same would not be entitled to claim the benefit under the said notification. Clause 3A(b) specifically excludes such goods even for the purpose of ascertaining the total quantum of production in order to decide the slab of quantity for availing the benefit of exemption under the said noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice came to be issued to him for recovery of duty on the goods bearing Ramesh brand. When the matter came up before the Tribunal relaying upon the decision in the matter of Faridabad Tools Pvt. Ltd. v. CCE reported in 1993 (63) E.LT. 759 (Tribunal), it was held that the similar issue was decided in favour of the assessee and, therefore, agreed with the decision of the Asstt. Collector, who had dropped the proceedings in favour of the assessee while setting aside the order passed by the Collector (Appeals). The matter was then carried before the Apex Court. The same was disposed of after taking note of the decision in the decision of the Larger Bench of the Tribunal in Kamani Foods v. CCE reported in 1995 (75) E.L.T. 202 (Tribunal). The Notification No. 175/86-C.E., have to be read as a whole and as noted rightly in Kharia Cement Works (supra), sub-clause (i) and (ii) have to be construed harmoniously. The exemption envisaged for the specified goods accrues to them through instrumentality of the manufacturer. The notification clearly demarcated the two categories of manufacturers. A clear cut distinction is explicit between a manufacturer availing Modvat credit under Rule 57A and an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 175/86-C.E., dated 1-3-86, it is abundantly clear that the manufacturer thereunder was given clear option to choose between the two benefits, one under the notification and another under the Modvat Scheme and not to avail both the benefits simultaneously. That is not the case under Notification No, 8/2003-C.E., dated 1-3-2003. There is no such restriction imposed under the said notification. Rather plain reading of Clauses 3, 3A and 4 of the said notification would disclose that the manufacturers are not debarred from availing the benefit under the said notification in relation to the goods other than the goods which are excluded from the benefit of the said notification while simultaneously seeking to avail the benefit of Cenvat credit or Modvat credit in relation to such excluded goods provided they are cleared on payment of full duty. The notification being abundantly clear in this regard, in our considered opinion, the Authorities below erred in applying the decision, in Ramesh Food Products to the cases in hand and to deny the benefit of SSI exemption to the goods to which the said exemption notification applies. The impugned orders, therefore, in this regard, cannot be susta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner (Appeals). 4.5 In case of Commissioner of Customs (Import), Mumbai Vs. M/s. Dilip Kumar and Company Ors. [Civil Appeal No. 3327 of 2007], Five Member Constitutional Bench of Supreme Court has by its order dated 30 th July 2018, [2018 (7) TMI 1826 (SC)] held as follows: 52. To sum up, we answer the reference holding as under (1) Exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification. (2) When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject/ assessee and it must be interpreted in favour of the revenue. (3) The ratio in Sun Export case (supra) is not correct and all the decisions which took similar view as in Sun Export Case (supra) stands overruled. 4.6 In light of the said decision of the Apex Court the decision of the Ahmedabad Bench in case of Synthetic Industries, more appropriately and aptly clarifies the position of law. The said decision is also in line with the Apex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant 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 inputs which stand utilised In the manufacture of the branded goods which have been cleared on payment of duty. The Revenue has denied the benefit of the Notification to the appellant's own manufactured goods on the ground that the simultaneous availment of notification as also the cenvat credit is not permissible. 3. First of all I would like to observe and find out as to what is the meaning of Simultaneous Availment . The notification in question exempts clearance up to first clearance of one hundred lakhs Rupees, subject to certain conditions enumerated in Para-2 of the notification. The Para-2 of notification gives an option to the manufacturer not to avail the said exemption and instead pay the normal rate of duty on the goods cleared by him. Condition contained in Para-2(iii) is that the manufacturer shall not avail the credit of duty on the inputs, in terms of Rule 3 or Rule-11 of the CENVAT Credit Rules, 2002, paid on inputs used in the manufacture of the specified goods cleared for home consumptio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 credit inasmuch as the payment of duty on the branded goods after availing the cenvat credit is a part and parcel of the same notification by way of Clause-4 of the notification, without their being any option to the appellant. The only option which the notification provides is that a manufacturer can either avail the exemption in respect of the first clearances or can opt for non-availment of exemption and pay duty on its goods (other than branded), in which case cenvat credit would be available to him. If a manufacturer clears a part of his own final product without payment of and clears another part of his own manufactured goods on payment of duty and after availing cenvat credit, such a situation would admittedly amount to simultaneous availment of exemption as well as cenvat credit, which, of-course, the notification does not provide. In my view, this is the meaning of the expression Simultaneous Availment used repeatedly in various decisions as also by the Lower Authorities. Where in terms of the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of the goods cleared for home consumption separately and the branded goods clearances is not required to be added in such clearances. This itself shows that both the clearances have to be treated separately i.e. one for the purpose of notification and the other for the purpose of the branded goods, to be cleared on payment of duty. 6. Referring to the precedent decision, I find that the Tribunal in the case of M/s Cure Quick Remedies P. Ltd. V/s Commissioner of Central Excise, Panchkula reported at 2010 (255) E.L.T. 249 (Tri.-Del.) has taken into consideration the entire development of the law on the said issue. After considering the various precedent decisions, it stands held by the Tribunal that The notification in question allows availment of SSI exemption and cenvat credit availed for non-branded goods at the same time the notification in question is the same Notification No.8/2003-Central Excise dated 01.03.2003 which is the subject matter of the present appeal. Reference and reliance by the Revenue on the Tribunal decision in the case of M/s Synthetic Industries V/s Commissioner of Central Excise Service Tax, Rajkot reported at 2016 (344) E.L.T. 1044 (Tri.-Ahm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation in respect of the own manufactured goods and clearance of branded goods, inasmuch as the assessee was not even manufacturing any branded goods. 7. In view of the above scenario, inasmuch as the applicability of the two said decisions of the Tribunal stands ruled out in the light of different facts, the Tribunal decision in the case of M/s Cure Quick Remedies P. Ltd. referred supra has to be followed inasmuch as the same is exactly on the issue and stands given after taking into account all the precedent decisions as also by differentiating the same. 8. The reference by my learned brother to Hon'ble Supreme Court decision in the case of Commissioner of Customs (Import), Mumbai V/s M/s. Dilip Kumar and Company Ors. is not in respect of the disputed issue in question. The Hon'ble Five Member Constitutional Bench of Supreme Court have laid down the law that exemption notification should be interpreted strictly and in case of the ambiguity in exemption Notification, it has to be interpreted in favour of the Revenue. 9. As already observed, in my views there is no ambiguity in the notification and even the strict interpretation of the Notification No.08/2003-Cent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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