Rancid Departure Leaves Bad Taste : Epitaph Records’ Brett Gurewitz hopes there won’t be more defections from his boutique operation to major labels.

Brett Gurewitz, who gained attention in punk-rock circles as a member of Bad Religion, should be celebrating these days.

Epitaph Records--the label he founded in the early ‘80s as a way to showcase the kind of independent music that major labels weren’t interested in--has come up with one of the year’s biggest rock hits: the Offspring’s album “Smash,” which has been in the national Top 10 for months.

But Gurewitz is nervous that success may ultimately write the label’s own epitaph.

Though the Offspring hasn’t left the label yet, the group’s growing sales have caused major labels to comb the company’s roster in hopes of finding another Offspring and dangling a big-bucks deal in front of it.

And his fears have been realized: Rancid, a Bay Area band whose debut album on Epitaph has sold more than 100,000 copies, has just been signed by giant Epic Records after aggressive courting by Epic A&R; executive Michael Goldstone, who also signed Pearl Jam and Rage Against the Machine.

“They were pilfered,” says Gurewitz, calling this the first defection from the Epitaph “family” in the company’s history.

Rancid manager Jeff Saltzman says that the decision to leave Epitaph was entirely the band’s. In fact, he adds, the group nearly turned down Epic’s huge offer--as well as similar ones by several other major labels--to stay with the independent company. Ultimately, though, it was simply “the right time to move,” Saltzman says.

That’s what has Gurewitz baffled and angry. He says his company was formed to give custom service and total artistic freedom to young acts, hoping to demonstrate that it’s possible for bands to thrive outside the record industry corporate structure.

He’s now hoping the Rancid move doesn’t trigger a rash of defections.

Other indie labels have protected themselves by working out distribution and development deals with major labels--the latest being Sub Pop, the Seattle company that launched Nirvana, which has just been bought in part by the Warner Music Group for a reported $20 million.

But Gurewitz remains adamant that he will not enter into any such arrangement, since it’s his very independence from the majors that makes him attractive to many young punk bands in the first place.

“As far as I know everyone’s happy here, but that’s what I would have said about Rancid a month ago,” he says.

The real wild card in the move: Jeff Saltzman and his partner Elliot Cahn also manage Epitaph act Pennywise and are the Offspring’s attorneys.

In addition, the pair--who also manage Bay Area punk band Green Day--are forming their own Oakland-based label, 510 Records, with a major-label distribution deal in the works. That could put them in direct competition with Epitaph for bands.

Saltzman would not discuss details of Rancid’s Epic deal, but he hopes to put Gurewitz’s mind at ease about future dealings.

“I have no intent of taking other bands away from Epitaph,” he says.

Meanwhile, the Offspring’s manager, Jim Guerinot, is reportedly near to scoring his own deal for a major-distributed label.

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UNPLUGGED HOLE: Courtney Love is set to turn down the decibels when her band Hole tapes an “MTV Unplugged” episode in February. This will be joined by a separate taping of the Cranberries in an acoustic setting for the next crop of installments in the MTV series. But don’t look for extravagant productions a la the recent Robert Plant/Jimmy Page “Unledded” and Eagles “Hell Freezes Over” shows.

“The ‘Unledded’ and Eagles shows are clearly ‘Unplugged’-inspired, but not sort of what you might call traditional ‘Unpluggeds,’ ” says Doug Herzog, MTV senior vice president of programming. “We can get pretty parochial about that. We want to keep the idea of people just coming in and doing their songs in this setting.”

Still, Herzog says that MTV is looking for ways to keep the show “evolving.” Among things being considered for next year are multi-artist Christmas and reggae specials.