Small scale exemption remains available for own goods despite duty-paid branded manufacture for others under Notification No. 8/2003-CE.

The small scale exemption under Notification No. 8/2003-CE is to be examined with reference to the exempted goods and the notification conditions, not by aggregating clearances of goods manufactured for others that bear another person's brand name. Where branded goods are cleared on payment of duty and Cenvat credit is availed on inputs used in those goods, that fact does not by itself disqualify the assessee from claiming the exemption for its own manufactured goods. The Tribunal followed the principle already affirmed by the Supreme Court and earlier Tribunal rulings, and held that denial of the exemption was unsustainable.

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Issues: Whether the assessee was entitled to the benefit of Notification No. 8/2003-CE dated 01.03.2003 for its own manufactured goods despite manufacturing branded goods for others and availing Cenvat credit on inputs used in such branded goods.

Analysis: The assessee manufactured both its own goods and goods bearing the brand name of others. The dispute turned on whether the manufacture and clearance of branded goods on payment of duty, with availing of Cenvat credit on inputs used therein, disentitled the assessee from availing the small scale exemption for its own goods. The Tribunal applied the principle already affirmed by the Supreme Court and followed in earlier Tribunal decisions that the exemption under the notification is to be tested with reference to the specified goods covered by the exemption and the relevant conditions, and that branded goods of another person which are not eligible for exemption are not to be counted in the aggregate value of clearances for the exempted goods.

Conclusion: The assessee was entitled to the benefit of Notification No. 8/2003-CE dated 01.03.2003 for its own manufactured goods, and denial of the exemption was unsustainable.

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