TMI Blog2019 (12) TMI 278X X X X Extracts X X X X X X X X Extracts X X X X ..... 04 (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. - Appeal No. E/368/2011 - IO/68/2018 - Dated:- 2-12-2019 - 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he order of adjudicating authority. Hence this appeal before us. 3.1 we have heard Shri Manoj Deshpande CA for the appellants and Shri M R Melvin 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 [ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise the credit of duty on capital goods under rule 3 or rule 11 of the said rules, paid on capital goods, for payment of duty, if any, on the aforesaid clearances, the aggregate value of first clearances of which does not exceed rupees one hundred lakhs, as calculated in the manner specified in the said Table; (v) where a manufacturer clears the specified goods from one or more factories, the exemption 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, s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ification. The specified goods manufactured simultaneously in the brand name of the assessee himself are not excluded from availing the benefit of exemption under the said notification even though in case of the former goods, the assessee seeks to avail the Cenvat credit facility in respect of the duty paid on the inputs utilised in the manufacture of the branded specified goods on which the full duty is paid while clearing the same. 9. Indeed, the conclusion that the notification in question in relation 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 Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the matter in Ramesh Food Products was relating to the period prior to 1991-92. At the relevant time, there was no provision under the Modvat Scheme, whereby the manufacturer could simultaneously claim the Modvat benefit in relation to non-exempted goods and maintain separate accounts in relation to the inputs procured for utilisation in exempted and non-exempted goods similar to the one which is found incorporated in Rule 12(2 3) of the Cenvat Credit Rules, 2004. In other words, the manufacturer had to opt either to avail the benefit 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at, for the availment of benefit of Notification No. 8/2003-C.E., there is prime condition that manufacturer shall not avail the credit of duty on inputs under 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 consumption. In the present case, the appellant has availed and utilized the Cenvat credit considering that their product is non-specified product under the SSI exemption during the intervening period and being non-specified product, there is no violation of the notification. I find that, the appellant have 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is statutorily provided, input duty relief is given under the scheme to the manufacturers who opt to operate under the scheme by applying for it in the prescribed manner. Ultimately the manufacturers have the choice of choosing one of the two concessions, i.e. either The Modvat Scheme or Notification 175/86. Further, there is no one to one correlation between the inputs and final products under Modvat Scheme. It would therefore not possible to allow the manufacturer to simultaneously avail Modvat for some products and avail full exemption for others under small-scale exemption scheme. 4.7 Following the said decisions and specifically the recent decision of the Constitutional Bench of Hon ble Supreme Court referred above we do not find any 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, M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 debars the applicability of the Notification if the goods bear the brand name or trade name of another person, except in certain circumstances. I would first like to examine and interpret the said notification without the aid of any precedent decisions, to which reference would be made in succeeding paras. Cumulative reading of all the above clauses of the notification leads to only one conclusion that the notification in question grants exemption to specified goods up to a particular aggregate clearance value, subject to non-availment of credit. Further, the same notification requires payment of duty on the specified goods if they bear the brand name or trade name of another person. It also stands clarified in the same notification that for computing the aggregate value of clearances which are entitled to the benefit of notification, the clearances bearing the brand name shall not be taken into account. This clarifies that under the same 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 b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n account. An interpretation which deviates from the legislature intent and leads to absurd results, has to be avoided. 5. Further, the Central Excise Authorities cannot control the business plans of a manufacturer. If in addition to manufacturing his own goods, to which it would be admittedly entitled to exemption up to the first clearances of Rupees one crore, he manufactures the branded goods for others also, the denial of the exemption in respect of his own goods would be contrary to the benefit sought to be extended by the legislature to small scale industries. Taking a hypothetical example that if the manufacture A is exclusively manufacturing his own goods he would be admittedly entitled to the benefit of the notification up to the first clearance of one crore. On the other hand if manufacturer B apart from manufacturing his own goods to the extent of ₹ 95 lakhs, in addition manufactures branded goods up to ₹ 5 lakhs and clears the same on payment of duty 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fication in question. However, for the further period 01.08.2006 to 09.08.2006 they availed cenvat credit in respect of the same PD pumps and paid duty on their final product. As such the Tribunal held that availment of exemption in respect of the same very goods during a part of financial year, in respect of a part clearance and then switching to payment of duty after availment of credit, is not permissible as simultaneous availment of the Notification for claiming the exemption as also the cenvat credit is not available. I have already observed as to what is the meaning of simultaneous availment. If an assessee avails the exemption in respect of part of the goods and also avails the credit and pays duty in respect of the another part of the same very goods, it is the simultaneous availment which is not permissible. That is what stands held in the above decision of the Tribunal in the case of M/s Synthetic Industries V/s Commissioner of Central Excise Service Tax, Rajkot. The facts of the case of M/s Synthetic 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 Industri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10. In view of the forgoing, I am of the opinion that the impugned order is required to be set aside and appeal is to be allowed with consequential relief to the appellant. I order accordingly. (Archana Wadhwa) Member (Judicial) Difference of Opinion 11. Whether the appeal has to be rejected as held by Learned Member (Technical) or the same has to be allowed as held by Learned Member (Judicial). (Pronounced in Court on 18.12.2018) (Sanjiv Srivastava) Member (Technical) (Archana Wadhwa) Member (Judicial) Per: Dr. D.M. Misra Heard both sides. 2. The present matter has been referred to third Member by the Hon ble President on account of difference of opinion between the Member (Judicial) and Member (Technical) on the issue of eligibility of Notification No. 8/2003-CE dated 1.3.2003 availed by the appellant during the relevant period from Sept, 2008 to August, 2009. 3. To appreciate the point of difference, it is necessary to narrate the facts. The appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the other hand, has submitted that the Hon'ble Supreme Court recently in the case of Commissioner of Central Excise, Chennai Vs. Nebulae Health Care Ltd. 2015 (325) ELT 431 (SC) distinguishing the earlier judgment in Ramesh Food Product s case held that an assessee can avail SSI exemption and also CENVAT Credit on inputs used in the manufacture of goods on jobwork basis bearing brand name of others side by side. Also, he has referred to the judgment of this Tribunal in the case of Commissioner of Central Excise, Kanpur Vs. U.P. Engineering Corporation 2010 (261) ELT 888 (Tri- Del). 6. I have carefully considered the submissions and perused the orders passed by learned Member (Judicial) and also learned Member (Technical). I find that the issue of eligibility of SSI exemption under various notifications issued from time to time in line with Notification No. 8/2003-CE dated 1.3.2003, when the assessee also avails CENVAT Credit on inputs used for the goods manufactured on job-work basis by affixing the brand name of others, has been considered by the Hon ble Supreme Court in Nebulae Health Care Ltd. s case. Their Lordships analyzing the principles laid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me 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 products manufactured by the SSI Units is concerned. 7. In the aforesaid 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, I find that 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, which reads as: Provided that nothing contained in this clause shall apply to the inputs used in the ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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