SSI exemption remains available despite CENVAT credit on other goods when the notification conditions are otherwise satisfied.

Notification No. 8/2003-CE was read as permitting SSI exemption for goods bearing the assessee's own brand name even where CENVAT credit was availed in respect of other goods cleared on duty payment. The notification was treated as distinguishing between goods excluded from exemption and other eligible goods, so taking credit for ineligible or separately dutiable goods did not by itself bar exemption for the covered goods. On that basis, the denial of SSI exemption, and the consequential demand, interest and penalty, were held unsustainable.

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Issues: Whether the assessee could claim the benefit of Notification No. 8/2003-CE dated 01.03.2003 for goods bearing its own brand name while also availing CENVAT credit in relation to other goods cleared on duty payment.

Analysis: The exemption notification was held to distinguish between goods excluded from the exemption and goods otherwise eligible for it. The earlier Tribunal decision relied on had already held that the notification does not impose a bar against availing SSI exemption for one class of goods merely because CENVAT credit is taken in relation to other goods, provided the excluded goods are cleared on payment of full duty. The reasoning also drew support from the view that the manufacturer is not debarred from simultaneously using the notification for eligible goods and credit for ineligible goods.

Conclusion: The assessee was entitled to the SSI exemption notwithstanding availing CENVAT credit in relation to other goods, and the denial of exemption and consequential demand, interest, and penalty were unsustainable.

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