CESTAT,
AHMEDABAD BENCH
Saurashtra
Exports
v.
Commissioner
of Central Excise, Rajkot
M.
VEERAIYAN, TECHNICAL MEMBER
Order
No. A/1037/WZB/AHD/2007
APPEAL
NO. ST/21/2006
APRIL
30, 2007
Rule 3 of the Cenvat Credit Rules, 2004 - Cenvat credit - Period April
2005 to June, 2005 - Assessee was manufacturer of pressure cookers in its own
brand name and also in brand name of others - It was paying duty on both
categories of pressure cookers till 31-3-2005 and during that period was
availing cenvat credit - Thereafter assessee started availing exemption under
Notification No. 8/03 in respect of pressure cookers manufactured with its own
brand name and continued to avail cenvat credit in respect of input going into
manufacture of pressure cookers cleared with brand name of others - Original
authority as well as Commissioner (Appeals) held that assessee could not
simultaneously avail small scale exemption for product cleared in its own brand
name and avail cenvat credit for goods cleared on payment of duty with brand name
of others and, therefore, denied cenvat credit attributable to goods cleared in
brand name of others - Whether order of Commissioner (Appeals) was justified -
Held, yes [Para 9]
CIRCULARS AND NOTIFICATIONS
Notification No.8/2003
CBEC’s Circular No.323/39/97-CX dated 14-7-1997
The assessee was a manufacturer of pressure cookers in its own brand name and also in the brand name of others. It was paying duty on both categories of pressure cookers till 31-3-2005 and during that period was availing cenvat credit. Vide its letter dated 31-3-2005, the assessee opted out of cenvat scheme and started availing exemption under Notification No. 8/03 in respect of pressure cookers manufactured with its own brand name and continued to avail the cenvat credit in respect of input going into manufacture of pressure cookers cleared with brand name of others. The original authority held that since the assessee was clearing pressure cookers with its own brand name and in the brand name of others, it could not simultaneously avail small scale exemption for the product cleared in its own brand name and avail the cenvat credit for the goods cleared on payment of duty with the brand name of others. He, accordingly, denied cenvat credit attributable to goods cleared in the brand name of others. On appeal, the Commissioner (Appeals) upheld the order of original authority.
In instant appeal, the assessee, relying upon CBEC’s Circular No.323/39/97-CX dated 14-7-1997, contended that the input credit attributable to the brand goods which were cleared on payment of duty and which were not accounted towards duty free clearances under Notification No.8/03 should be allowed.
The product manufactured by the assessee whether it was cleared on its own account or cleared with the brand name of others were both covered under tariff heading 76151910. The goods manufactured by it was specified goods for the purpose of Notification No.8/2003. It sought to enlarge the benefit in respect of small scale unit who export part of its goods and continue availing the exemption as value of clearances made for export were not counted for the purpose of determining the small scale exemption limit. There is opposite condition prescribing that if the person availing small scale exemption, manufactures with the brand name of another person, such clearance even if the same is within the overall limit of small scale exemption are treated differently and are subject to duty. Therefore, the reliance sought to be placed on the 1997 circular permitting cenvat credit in respect of the inputs used in export goods to claim cenvat credit in respect of dutiable branded goods, was misplaced. (Para 7)
The claim of the assessee to avail modvat credit for part of the goods cleared by it and at the same time seeking to avail small scale exemption for the part of the goods cleared in its own account was not permissible. (Para 9)
In the light of the above, no valid grounds had been adduced to interfere with the findings and reasonings of Commissioner (Appeals). (Para 10)
The appeal was, therefore, rejected.