SSI exemption remains available for own-brand goods even when duty-paid third-party branded clearances and Cenvat credit are involved.

Goods bearing another person's brand name, when cleared on payment of duty, fell outside the small-scale exemption scheme and were not to be counted in computing aggregate home clearances. Availment of Cenvat credit on those duty-paid branded clearances did not forfeit the assessee's entitlement to exemption for its own manufactured goods under Notification No. 8/2003-Central Excise. The Tribunal followed the Supreme Court ruling in Nebulae Health Care and its earlier consistent view, and held that denial of the exemption was unsustainable.

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Issues: Whether the assessee was entitled to exemption under Notification No. 8/2003-Central Excise dated 01.03.2003 for its own branded clearances despite also clearing goods bearing the brand name of other persons on payment of duty and availing Cenvat credit on those clearances.

Analysis: The applicable exemption notification had to be read in light of the scheme governing small scale industry clearances. The clearances bearing the brand name of another person were outside the exemption scheme and were not to be taken into account for computing the aggregate value of home clearances. Once such third-party branded goods were cleared on payment of duty, the availment of Cenvat credit in relation to those goods did not forfeit the exemption for the assessee's own manufactured goods. The Tribunal applied the ratio of the Supreme Court decision in Nebulae Health Care and followed its own earlier consistent view on the same notification.

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

Ratio Decidendi: Clearances of goods bearing another person's brand name, when not eligible for exemption and cleared on duty, do not defeat SSI exemption for the assessee's own goods under the notification, nor do they prevent Cenvat credit on the duty-paid branded clearances.

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