Simultaneous availment of SSI exemption and Cenvat on inputs used in goods cleared on payment of duty is permissible

Commissioner of Central Excise, Pondicherry Vs. Shrushthi Plastics (P) Ltd. [2015 (11) TMI 316 - CESTAT CHENNAI]

Facts:

Shrushthi Plastics (P) Ltd. (“the Respondent”) was availing the benefit of exemption under Notification No. 8/99-CE dated February 29, 1999 (“the SSI exemption”) on the goods manufactured by them. Simultaneously, the Respondent has paid full Excise duty on the goods bearing the brand name of another person, which were manufactured on job work basis and accordingly, claimed Cenvat credit on inputs used in the manufacturing of these goods. The Department alleged that the Respondent cannot simultaneously avail the benefit of SSI exemption and Cenvat credit on inputs used in the manufacturing of goods cleared on payment of duty.

Held:

The Hon’ble CESTAT, Chennai, applied the ratio of the Apex court decision in case of Nebulae Health Care Ltd. Vs. CC Chennai [2006 (8) TMI 74 - CESTAT, CHENNAI], which squarely applies to the instant case, wherein the Hon’ble Supreme Court after distinguishing their own case in the case of Commissioner Vs. Ramesh Food Products [2004 (11) TMI 103 - SUPREME COURT OF INDIA]upheld this Tribunal's order. The Hon’ble Supreme Court has held that the Respondent can avail simultaneously the benefit of SSI exemption on the goods pertaining to them and Cenvat credit on inputs used in the manufacturing of goods cleared on payment of duty.