TaxTMI 
TaxTMI 
2019 (12) TMI 278
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....ive Thousand only) under rule 27 of the Central Excise Rules, 2002 on M/s Cologicx Systems Ltd. 42, Electronics Cooperative Industrial Estate Pune Satara Road Pune 411009 for violation of Rule 5, 6 and 8 of Central Excise Rules, 2002. I demand interest from M/s Cologicx Systems Ltd. 42, Electronics Cooperative Industrial Estate Pune Satara Road Pune 411009 under section 11AB of the Central Excise Act, 1944 from the date of clearance of the said goods till payment of the duty. This order has been passed without prejudice to any other action whicjh may be taken against the noticee under the Central Excise Act, 1944 or the Central Excise Rules, 2002 or any other laws for the time being in force in the Republic of India." 2.0 Appellants are availing of the benefit of exemption Notification No 8/2003-CE dated 01.03.2003 in respect of the goods cleared by them. In respect of the goods cleared under brand name of others they were paying the duty at applicable rate and availed the CENVAT Credit of duty paid on inputs used in manufacture of such goods. Department objected to availing of such simultaneous of benefit under Notification No 8/2003- CE and CENVAT Credit in r....
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.... by him. Such option shall be exercised before effecting his first clearances at the normal rate of duty. Such option shall not be withdrawn during the remaining part of the financial year; (ii) while exercising the option under condition (i), the manufacturer shall inform in writing to the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise with a copy to the Superintendent of Central Excise giving the following particulars, namely :- (a) name and address of the manufacturer; (b) location/locations of factory/factories; (c) description of inputs used in manufacture of specified goods; (d) description of specified goods produced; (e) date from which option under this notification has been exercised; (f) aggregate value of clearances of specified goods (excluding the value of clearances referred to in paragraph 3 of this notification) till the date of exercising the option; (iii) the manufacturer shall not avail the credit of duty on inputs under rule 3 or rule 11 of the CENVAT Credit Rules, 2002 (herein after referred to as the said rules), paid on inputs used in the manufactur....
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....upto an aggregate value not exceeding one hundred lakh rupees made on or after the first day of April in any financial year", shall be liable for nil rate of duty. 8. Perusal of the above provisions of the notification makes it abundantly clear that in case of specified goods bearing brand name or trade name, whether registered or not, of another person being manufactured by the assessee, the same would not be entitled to claim the benefit under the said notification. Clause 3A(b) specifically excludes such goods even for the purpose of ascertaining the total quantum of production in order to decide the slab of quantity for availing the benefit of exemption under the said notification. This is abundantly clear from Clause 3A(b) of the said notification, which provides that, "for the purpose of determining the first clearance upto an aggregate value not exceeding one hundred lakh rupees made on or after first day of April in any financial year", the clearance bearing the brand name or trade name of another person, which are ineligible for the grant of the said exemption in terms of Clause 4 of the said notification shall not be taken into account. Obviously, therefore, the ....
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....s). The matter was then carried before the Apex Court. The same was disposed of after taking note of the decision in the decision of the Larger Bench of the Tribunal in Kamani Foods v. CCE reported in 1995 (75) E.L.T. 202 (Tribunal). The Notification No. 175/86-C.E., have to be read as a whole and as noted rightly in Kharia Cement Works (supra), sub-clause (i) and (ii) have to be construed harmoniously. The exemption envisaged for the specified goods accrues to them through instrumentality of the manufacturer. The notification clearly demarcated the two categories of manufacturers. A clear cut distinction is explicit between a manufacturer availing Modvat credit under Rule 57A and another not opting for the benefit of the Modvat scheme. As is statutorily provided, input duty relief is given under the scheme to the manufacturers, who opt to operate under the scheme by applying for it in the prescribed manner. Ultimately, the manufacturers have the choice of choosing one of the two concessions i.e. either the Modvat Scheme or Notification No. 175/86- C.E. Further, there is no one-to-one correlation between the inputs and final products under the Modvat Scheme. It would, therefore, no....
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.... not debarred from availing the benefit under the said notification in relation to the goods other than the goods which are excluded from the benefit of the said notification while simultaneously seeking to avail the benefit of Cenvat credit or Modvat credit in relation to such excluded goods provided they are cleared on payment of full duty. The notification being abundantly clear in this regard, in our considered opinion, the Authorities below erred in applying the decision, in Ramesh Food Products to the cases in hand and to deny the benefit of SSI exemption to the goods to which the said exemption notification applies. The impugned orders, therefore, in this regard, cannot be sustained and the demand of duty made while denying the benefit under the said notification cannot be sustained. For the reasons stated above, therefore, the appeals succeed and they are allowed. The impugned orders are, therefore, set aside with consequential relief. 4.4 In case of Synthetic Industries, supra, Ahmedabad bench has held as follows: "4. A short question involved for determination is : whether the appellant are eligible to the benefit of Notification No. 8/2003-C.E., dated 1-3-200....
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.... comes within the parameters of the exemption clause or exemption notification. (2) When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject/assessee and it must be interpreted in favour of the revenue. (3) The ratio in Sun Export case (supra) is not correct and all the decisions which took similar view as in Sun Export Case (supra) stands overruled." 4.6 In light of the said decision of the Apex Court the decision of the Ahmedabad Bench in case of Synthetic Industries, more appropriately and aptly clarifies the position of law. The said decision is also in line with the Apex Court decision in case of Ramesh Food [2004 (174) ELT 0310 (SC)] "10.Notification 175/86 have to be read as a whole and as noted rightly, in Kharia Cement Works case (supra) sub-clauses (i) and (ii) have to be construed harmoniously. Exemption envisaged for the specified goods accrues to them through instrumentality of the manufacturer. The notification clearly demarcated the two categories of manufacturers. A clear cut distinction is explicit between a manufacturer availing Modvat c....
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....e to observe and find out as to what is the meaning of 'Simultaneous Availment'. The notification in question exempts clearances up to first clearance of one hundred lakhs Rupees, subject to certain conditions enumerated in Para-2 of the notification. The Para-2 of the notification gives an option to the manufacturer not to avail the said exemption and instead pay the normal rate of duty on the goods cleared by him. Condition contained in Para-2(iii) is that the manufacturer shall not avail the credit of duty on the inputs, in terms of Rule 3 or Rule-11 of the CENVAT Credit Rules, 2002, paid on inputs used in the manufacture of the specified goods cleared for home consumption and in terms of Para 2(iv) the credit of duty paid on the capital goods would also not be available to them. Para-3 of the Notification makes it clear that the clearances bearing the brand name or trade name of another person, which are ineligible for the grant of the exemption in terms of paragraph-4 shall not be taken into account for determining the aggregate value of clearance of home consumption. Further, Para-4 debars the applicability of the Notification if the goods bear the brand name or trade name of....
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....f the first clearances or can opt for non-availment of exemption and pay duty on its goods (other than branded), in which case cenvat credit would be available to him. If a manufacturer clears a part of his own final product without payment of duty and clears another part of his own manufactured goods on payment of duty and after availing cenvat credit, such a situation would admittedly amount to simultaneous availment of exemption as well as cenvat credit, which, ofcourse, the notification does not provide. In my views, this is the meaning of the expression 'Simultaneous Availment' used repeatedly in various decisions as also by the Lower Authorities. Where in terms of the same notification a manufacturer is under a legal obligation to clear the branded goods on payment of duty, the benefit of exemption available in terms of the precedent paragraphs of the notification cannot be taken away from the manufacturer. Such an interpretation would lead to making the said notification as infructuous or otiose vis-a-vis the goods manufactured by a manufacturer on its own account. An interpretation which deviates from the legislature intent and leads to absurd results, has to be avoided. ....
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.... Commissioner of Central Excise, Panchkula reported at 2010 (255) E.L.T. 249 (Tri.-Del.) has taken into consideration the entire development of the law on the said issue. After considering the various precedent decisions, it stands held by the Tribunal that The notification in question allows availment of SSI exemption and cenvat credit availed for non-branded goods at the same time the notification in question is the same Notification No.8/2003-Central Excise dated 01.03.2003 which is the subject matter of the present appeal. Reference and reliance by the Revenue on the Tribunal decision in the case of M/s Synthetic Industries V/s Commissioner of Central Excise & Service Tax, Rajkot reported at 2016 (344) E.L.T. 1044 (Tri.-Ahmd.) is not applicable to the facts of the present case. On going through the impugned order, which in any case is an ex-partee order, I find that the appellant in that case was manufacturing PD Pumps. The appellant cleared the PD pumps for July, 2006 to October, 2006 by availing the benefit of the notification in question. However, for the further period 01.08.2006 to 09.08.2006 they availed cenvat credit in respect of the same PD pumps and paid duty on their....
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....d stands given after taking into account all the precedent decisions as also by differentiating the same. 8. The reference by my learned brother to Hon'ble Supreme Court decision in the case of Commissioner of Customs (Import), Mumbai V/s M/s. Dilip Kumar and Company & Ors. is not in respect of the disputed issue in question. The Hon'ble Five Member Constitutional Bench of Supreme Court have laid down the law that exemption notification should be interpreted strictly and in case of the ambiguity in exemption Notification, it has to be interpreted in favour of the Revenue. 9. As already observed, in my views there is no ambiguity in the notification and even the strict interpretation of the Notification No.08/2003- Central Excise dated 01.03.2003 leads us to the conclusion that the same covers two different situations, one in respect of own manufactured goods by SSI manufacture and the other in respect of branded goods by the same SSI manufacture. 10. In view of the forgoing, I am of the opinion that the impugned order is required to be set aside and appeal is to be allowed with consequential relief to the appellant. I order accordingly. (Archana Wadhwa) Member (Judic....
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.... the benefit of SSI Exemption Notification No. 8/2003-CE cannot be denied to the appellant in relation to own manufactured goods, when the branded goods cleared on payment of duty, even if with CENVAT benefit. 4. The learned AR for the Revenue reiterates the findings of the learned Member (Judicial). In support, he referred the judgment of the Hon'ble Supreme Court in the case of Ramesh Food Products (supra) and this Tribunal's judgment in the case of Synthetic Industries Vs. Commissioner of Central Excise & Service Tax, Rajkot - 2016 (344) ELT 1044 (Tri-Ahmd) and Warna Packaging Pvt. Ltd. Vs. Commissioner of Central Excise, Pune-II - 2017 (347) ELT 638 (Tri-Mum). 5. Learned Advocate Shri Manoj Deshpande for the appellants, on the other hand, has submitted that the Hon'ble Supreme Court recently in the case of Commissioner of Central Excise, Chennai Vs. Nebulae Health Care Ltd. - 2015 (325) ELT 431 (SC) distinguishing the earlier judgment in Ramesh Food Product's case held that an assessee can avail SSI exemption and also CENVAT Credit on inputs used in the manufacture of goods on jobwork basis bearing brand name of others side by side. Also, he has referred to the ju....
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....d parties, even if manufactured by the SSI Unit, are not eligible for any exemption and excise duty thereupon has to be paid. Once we understand the scheme of the Notifications in the aforesaid perspective, which according to us is the only manner in which it has to be understood, it becomes apparent that so far as manufacture of branded goods of third party on job work basis by the SSI Unit is concerned, they are to be dealt with differently in the sense that they do not come within the ambit of exemption on which normally excise duty, as per the provisions of the Act, is payable. As a sequitur, it also follows that once excise duty is paid by the manufacturer on such branded goods manufactured, the brand name whereof belongs to another person, on job work basis, the SSI Unit would be entitled to Cenvat/Modvat credit on the inputs which were used for manufacture of such goods as on those inputs also excise duty was paid. To put it otherwise, these branded goods manufactured by the SSI Units meant for third parties are regulated by the normal provisions of excise law and will have no bearing or relevance insofar as availing the benefit of those exemption notifications in respect of....