Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise and Customs
New Delhi, 19th January, 2009.
To
The Chief Commissioners of Central Excise (All),
The Commissioners of Central Excise (All)
DGCEI.
Subject: - 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.
Sir,
Reference has been received from associations as well as field formations on the
issue as to whether a manufacturer who has opted to avail exemption from payment
of duty based on value of clearance as per SSI notification, can also avail
credit of duty paid on inputs used in the manufacture of branded (others)
dutiable goods.
- SCNs have been issued citing the judgment of Apex Court in the case of Ramesh
Food Products, 2004(174)ELT 310 (SC). In the case of Ramesh Food Products, it
was held by the Supreme Court that under Notification No.175/86-CE, simultaneous
availment of credit of duty paid on inputs used in the manufactured of branded
(others) dutiable goods and availment of full exemption for non-branded goods is
not permissible.
- Subsequently, in the case of Nebulae Health Care Ltd vs. Commissioner of
Customs, Chennai, 2006-TIOL-1380-CESTAT-Mad, the Tribunal has held that
simultaneous availment of credit for inputs used in the manufacture of branded
products and of full exemption for other products is permissible under the
subsequent SSI exemption Notification Nos. 8/99, 9/99, 8/2000, 8/2001, 8/2002
and 8/2003. In the said judgment, the Tribunal discussed the Supreme Court
judgment in Ramesh Food products case at length, and held that Supreme Court
decision was not applicable to present case where the notifications under
consideration were differently worded.
- An appeal has been filed before the Supreme Court against the decision of the
Tribunal in the case of M/s Nebulae Health Care Limited. This appeal has been
admitted.
- Now, since an appeal has been filed before the Supreme Court in the case of
M/s Nebulae Health Care, the Board has decided that it would be appropriate to
await the outcome of the Civil Appeal filed in the Supreme Court. Therefore,
such cases may be kept pending in call book.
Yours faithfully,
Sd/-
(Ashima Bansal)
Under Secretary to the Government of India
F No. 21/01/2006-CX-I