Availability of cenvat credit of the duty paid on the inputs used in the manufacture of branded goods on which duty is paid by a manufacturer who has opted to avail exemption on payment of duty based on the value of clearance as per SSI exemption notification.

Pending Supreme Court Decision on Duty Exemption and Cenvat Credit for Branded Goods Under SSI Notification.

The circular addresses the issue of whether manufacturers who opt for duty exemption based on clearance value under the SSI exemption notification can claim cenvat credit on inputs used for branded goods. It references conflicting judgments: the Supreme Court's decision in the Ramesh Food Products case, which disallowed simultaneous credit and exemption, and a Tribunal ruling allowing it under certain notifications. An appeal against the Tribunal's decision in the Nebulae Health Care case is pending in the Supreme Court. Consequently, the Board advises holding such cases in abeyance until the Supreme Court's decision is rendered.