SSI exemption denied for simultaneous CENVAT credit use; non-availment condition under the notification was not satisfied.

SSI exemption under Notification No. 8/2003-CE was unavailable where the manufacturer availed CENVAT credit on inputs used in the exempted goods. The notification required non-availment of such credit, and simultaneous use of the exemption and credit scheme during the relevant transitional period meant the condition was not satisfied. The reason for the breach was held irrelevant, and failure to prove separate stock or unutilised credit did not cure the defect. The demand was therefore correctly confirmed.

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Issues: Whether the appellant was entitled to the benefit of SSI exemption under Notification No. 8/2003-CE despite availing CENVAT credit on inputs during the relevant period.

Analysis: The condition in the notification required the manufacturer not to avail credit on inputs used in the manufacture of the exempted goods. The finding recorded was that the appellant had simultaneously availed the exemption and the CENVAT credit scheme during the transitional period. The reason for non-fulfilment of the condition was held to be irrelevant, and the absence of proof of separate stock or unutilised credit did not assist the appellant.

Conclusion: The appellant was not entitled to the benefit of the notification, and the demand was rightly confirmed.

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