Simultaneous availment of SSI exemption and MODVAT/CENVAT on inputs used in goods cleared on payment of duty is permissible: CESTAT

CHENNAI: THE respondent assessee is an SSI unit availing the exemption under Notification No 8/99 CE dated 28.02.1999. They were also manufacturing goods bearing brand name of Hindustan Lever Ltd on job work basis and clearing the same on payment of duty. The dispute is with regard to admissibility of MODVAT Credit on inputs used in the manufacture of branded goods cleared on payment of duty. The Adjudicating Authority and the Appellate authority dropped the demand, but on appeal by revenue, the Tribunal upheld the demand. However, the matter was remanded to the Tribunal by the High Court on appeal by the assessee.

On hearing both sides, the Tribunal held:


The issue relates to simultaneous availment of SSI exemption and modvat credit. The adjudicating authority and the appellate authority have clearly discussed the issue in detail and held that respondents have availed exemption on the goods pertaining to assessee whereas they paid full excise duty on the goods bearing the brand name of "HLL" which are manufactured on job work basis and allowed the benefit and Revenue preferred the present appeal. As per Notfn 8/99 as amended for the purpose of determining the aggregate value of clearances by a manufacturer, the clearance value of goods bearing the brand name of other persons are excluded. On the identical issue, in the case of Nebulae Health Care Ltd. Vs CC Chennai, this Tribunal after taking into consideration the Supreme Court judgement in the case of Commissioner Vs Ramesh Food Products and the Tribunal's Larger Bench decision in the case of Kamani Foods Vs Collector allowed the appeal of the assessee. The Revenue appeal against this Tribunal order and the Supreme Court in their order dt. 27.10.2015 in Civil Appeal No.2789/2007 in the case of CCE Chennai Vs Nebulae Health Care Ltd. - 2015-TIOL-261-SC-CX dismissed the Revenue appeal and upheld this Tribunal's order. The ratio of the apex court decision squarely applies to this case wherein the Supreme Court after distinguishing their own case in the case of Ramesh Foods upheld this Tribunal's order.

Accordingly, the Tribunal dismissed the revenue's appeal and upheld the order of lower authority.