Small scale exemption under Notification No. 8/2003-C.E. applied to branded goods clearances for pre-deposit waiver

Notification No. 8/2003-C.E. excludes clearances of goods bearing another person's brand name from the aggregate value of clearances for small scale exemption purposes. Applying that condition, the CESTAT found a strong prima facie case that the exemption could not be denied merely because the assessee had also cleared branded goods on payment of duty and taken credit on inputs used in those goods. On that basis, waiver of pre-deposit of duty and penalties was granted and the stay petitions were allowed.

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Issues: Whether the applicant was entitled to waiver of pre-deposit of duty and penalties in view of the small scale exemption under Notification No. 8/2003-C.E., notwithstanding clearances of branded goods on payment of duty and availment of credit on inputs.

Analysis: The demand had been confirmed on the premise that the applicant could not simultaneously avail the small scale exemption for goods manufactured under its own brand name and take credit in respect of duty paid inputs used in branded goods. The Tribunal noted that Notification No. 8/2003-C.E. itself required that clearances of goods bearing the brand name or trade name of another person were not to be taken into account for determining the aggregate value of clearances. On that basis, the Tribunal found that the applicant had a strong prima facie case and that the benefit of the notification could not be denied at the stage of considering waiver of pre-deposit.

Conclusion: Waiver of pre-deposit of duty and penalties was granted and the stay petitions were allowed.

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