SSI exemption remains available despite duty on branded goods; payment timing alone cannot convert an exempt unit into non-SSI status.

An exempted small-scale unit availing Notification No. 8/2003-C.E. did not lose SSI exemption merely because it paid duty on branded goods. The notification itself contemplated duty liability on such branded goods, and that payment did not convert the unit into a non-SSI unit. The departmental view that duty on branded goods had to be paid by the 5th of the succeeding month, and that failure on this basis justified denial of SSI status, was not sustainable. The demand treating the unit as a non-SSI unit therefore failed, and the impugned order was set aside with consequential relief.

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Issues: Whether an exempted small-scale unit availing Notification No. 8/2003-C.E. dated 1-2-2003 could be treated as a non-SSI unit merely because it paid duty on branded goods, and whether duty on such branded goods was required to be paid by the 5th of the succeeding month.

Analysis: The exemption notification itself contemplated duty liability on branded goods, and payment of duty on such goods did not by itself take away the benefit of the SSI exemption. The date of duty payment applicable to exempted units was not displaced merely because duty was paid on branded goods. The departmental view that the assessee had to pay duty by the 5th of the succeeding month for branded goods and, for that reason alone, be treated as a non-SSI unit was not sustainable.

Conclusion: The assessee was not liable to be denied the SSI exemption on this ground, and the departmental demand treating it as a non-SSI unit failed.

Final Conclusion: The impugned order was set aside and the appeal was allowed with consequential relief.

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