SSI exemption and CENVAT credit in mixed clearances: split views on whether simultaneous availment is permissible.

Eligibility for SSI exemption under Notification No. 8/2003-C.E. was examined where an assessee cleared own goods exemptedly while clearing branded goods on payment of duty with CENVAT credit on inputs. One view held that the notification permits exemption for own clearances and does not bar separate duty-paid branded clearances with credit, because branded goods are excluded from the exemption computation. The contrary view held that the notification requires a single election and prohibits simultaneous availment of SSI exemption and CENVAT credit, with strict construction favouring revenue where ambiguity exists. The Members therefore recorded differing conclusions on the core issue, with one Member favouring allowance of the appeal and the other its rejection.

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Issues: Whether an assessee manufacturing both own goods and branded goods could avail SSI exemption under Notification No. 8/2003-C.E. for own clearances while also taking CENVAT credit on inputs used for branded goods cleared on payment of duty.

Analysis: One view held that the notification permits exemption for own clearances and duty-paid clearance of branded goods with CENVAT credit, since the notification separately excludes branded goods from the exemption computation and does not bar such dual treatment. The other view held that the conditions of the notification require a single election and prohibit simultaneous availment of exemption and CENVAT credit, and that the exemption notification must be strictly construed in favour of the revenue where ambiguity exists.

Conclusion: The Members recorded differing conclusions on the core issue, with one Member favouring allowance of the appeal and the other favouring rejection of the appeal.

Dissenting Opinion: One Member held that the appellant was entitled to the exemption for its own goods and to CENVAT credit for branded goods, and therefore the appeal deserved to be allowed with consequential relief.

Dissenting Opinion: The other Member held that simultaneous availment of SSI exemption and CENVAT credit was not permissible under the notification and dismissed the appeal.

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