IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT AHMEDABAD
M/s Saurashtra Exports
CORAM: MR. M. VEERAIYAN, MEMBER (TECHNICAL)
Date of Hearing: 30.04.2007
Date of Decision: 30.04.2007
ORDER No. /WZB/AHD/2007
Per: Mr. M. Veeraiyan, Member (Technical)
This is an appeal against the order of Commissioner (Appeals) No. 633/2006/551(RAJ)/COMMR(A)/RP/ RAJ, dt.22.11.2006, by which the order of original authority No.06/D/06-07, dt.5.7.06 was upheld.
2. Heard both sides.
3. The relevant facts, in brief, are as follows:
a) The appellant is a manufacturer of pressure cookers in their own brand name and also in the brand name of others. They were paying duty on both categories of pressure cookers till 31.3.05 and during that period were availing cenvat credit.
b) They vide their letter dt.31.3.05 opted out of cenvat scheme and started availing exemption under Notification No.8/03 in respect of pressure cookers manufactured with their own brand name. They continued to avail the cenvat credit in respect of input going into manufacture of pressure cookers cleared with the brand name of others. They also utilized the credit lying as on 31.3.05 for payment of duty for dutiable pressure cookers cleared without availing 8/03.
c) The original authority took the view that since they are clearing pressure cookers, with their own brand name & in the brand name of others, they can not simultaneously avail small scale exemption for the product cleared in their own brand name and avail the cenvat credit for the goods cleared on payment of duty with the brand name of others. He denied cenvat credit amounting to Rs.78,919/- attributable to goods cleared in the brand name of others during the period April 2005 to June 2005. This order has been upheld by Commissioner (Appeals).
4. The learned advocate for the appellant submits the following:
a) The exemption availed for pressure cookers cleared on their own account is not in dispute. The clearance of pressure cookers in the brand name of others have been cleared on payment of duty. Value of such clearances stands excluded the purposes of Notification No. 8/03 and therefore, the proposal to deny the cenvat credit on inputs used on such clearances is not correct.
b) CBECs Circular No.323/39/97-CX dt.14.7.97 envisages that in respect of unit availing small scale exemption and also exporting goods, the cenvat credit attributable to input going into such export goods should not be denied. On the same analogy, the input credit attributable to the brand goods which are cleared on payment of duty and which are not accounted towards duty free clearances under Notification No. 8/03 should be allowed. He also relies on the following judgements: 1. Excel Foods Products Pvt. Ltd. Vs.CCE 1995 (79) ELT 288
2. CCE Vs. Startron Video Pvt. Ltd. 2000 (120) ELT 177
5. The learned DR submits that the appellant can not bifurcate the clearances one for availing small scale exemption and other for availing cenvat credit. He relies on the judgement in case of Ramesh Food Products Vs. CCE Ahmedabad reported in 2004 (174) ELT 310 (SC).
6. I have carefully considered the submissions made by both sides.
7. The product manufactured by the appellant whether it is cleared on their own account or cleared with the brand name of others are both covered under tariff heading 76151910. The goods manufactured by them are specified goods for the purpose of Notification No.8/2003. It seeks to enlarge the benefit in respect of small scale unit who export part of their goods and continue availing the exemption as value of clearances made for export are 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 is misplaced.
8. In the case of M/s Ramesh Food Products cited supra, the Honble Supreme Court, considered the availment of small scale exemption for some product and availment of modvat credit for other product and their findings are reproduced below: 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 credit under Rule 57A and another not opting for 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 175/86. Further, there is no one to one correlation between the inputs and final products under Modvat Scheme. It would therefore not possible to allow the manufacturer to simultaneously avail Modvat for some products and avail full exemption for others under small-scale exemption scheme.
9. The case of the appellant is covered by the ratio of Honble Supreme Court cited supra. The claim of the appellant to avail modvat credit for part of the goods cleared by them and at the same time seeking to avail small scale exemption for the part of the goods cleared in their own account is not permissible.
10. In the light of the above, I hold that no valid grounds have been adduced to interfere with the findings and reasonings of Commissioner (Appeals).
11. Appeal is, therefore, rejected.
(Dictated & Pronounced in Court)