Simultaneous availment of SSI exemption and cenvat credit.
Can an SSI unit avail full exemption for home consumption and still take credit on the inputs used in the manufacture of export goods? Board had in Circular No. 323/97,clarified that if the assessee wants to avail Modvat credit of duty paid on inputs used in the manufacture of goods exported, such credit can not be denied. Now it appears that there are doubts about the 1997 circular being applicable to the present Notification No. 8/2003 and the good Board has clarified that it is indeed applicable.
The Board’s letter says,
The matter has been examined. It is seen that the relevant condition of the erstwhile notification No. 16/97-CE is similar to the one innotification No. dated 01.03.2003 andnotification No. dated 01.03.2006, which prescribed that MODVAT / CENVAT credit paid on inputs used in the goods cleared for home consumption cannot be taken for availing benefit of the notification. In this context, Circular No. 323/39/97 – CX dated 14.07.1997 clarified that SSI exemption for home consumption can be availed simultaneously along with taking CENVAT Credit for the goods that are exported. Notification No.8/2003 – CE and Notification No. 8/2006 – CE dated 01.03.2006 also debar availment of CENVAT Credit on inputs used in the manufacture of goods cleared for home consumption only. Thus, it is hereby reiterated that the clarification given vide Circular No. 323/39/97 – CX is applicable even in the context of the notification No. 8/2003-CE dated 01.03.2003 and Notification No. 8/2006-CE dated 01.03.2006.
But what is this notification No 8/2006? It is only an amendment to Notification No.8/2003 and does not say anything about credit.
But Board deserves credit for issuing such clarifications. But again why is the Board shy of such nice instructions. What should have been given good publicity and circulated among all concerned has been silently informed in a letter to the Chief Commissioners. There is something wrong with the Public Relations of the Board; when they do something bad, they go out of their way to publicise that and when they do something good, they are totally secretive about that.
CBEC’sF.No. 267/14/06-Cx.8 dated 1st June 2006.