2007 (4) TMI 71 - AT - Central Excise

Manufacturer cannot claim small-scale exemption and Cenvat credit simultaneously for distinct products.

SAURASHTRA EXPORTS Versus COMMISSIONER OF C. EX., RAJKOT

SAURASHTRA EXPORTS Versus COMMISSIONER OF C. EX., RAJKOT - 2007 (215) E.L.T. 448 (Tri. - Ahmd.) Issues:1. Whether the appellant can simultaneously avail small-scale exemption and Cenvat credit for pressure cookers cleared under different brand names.Detailed Analysis:The appellant, a manufacturer of pressure cookers, opted out of the Cenvat scheme for goods cleared under their own brand name but continued to avail Cenvat credit for goods cleared under other brand names. The original authority denied Cenvat credit for goods cleared under other brand names, leading to an appeal. The appellant argued that the denial of credit was incorrect as the goods cleared under different brand names were distinct for the purpose of exemption under Notification No. 8/03. The appellant relied on CBEC Circular No. 323/39/97-CX and various judgments to support their claim. However, the learned DR contended that bifurcating clearances for exemption and credit was impermissible, citing the judgment in the case of Ramesh Food Products v. CCE, Ahmedabad (2004). The Tribunal observed that both categories of goods manufactured by the appellant fell under the same Tariff Heading and were covered by Notification No. 8/2003, which differentiated between goods cleared under different brand names for small-scale exemption purposes.Further Analysis:The Tribunal referenced the judgment in the case of M/s. Ramesh Food Products, where the Supreme Court clarified that manufacturers cannot simultaneously avail Modvat credit and small-scale exemption for different products. The Tribunal emphasized that there was no provision allowing manufacturers to claim both benefits concurrently. Therefore, the Tribunal concluded that the appellant's attempt to avail Cenvat credit for some goods while seeking small-scale exemption for others was impermissible. The Tribunal upheld the findings of the Commissioner (Appeals) and rejected the appellant's appeal based on the legal principles outlined in the judgments and the specific provisions of Notification No. 8/03.Overall, the Tribunal's decision centered on the interpretation of relevant notifications and legal precedents to determine the appellant's eligibility to avail small-scale exemption and Cenvat credit for pressure cookers cleared under different brand names. The judgment highlighted the statutory limitations on simultaneous availment of multiple tax benefits and emphasized the need for manufacturers to choose between available schemes without overlapping benefits.