2005 (1) TMI 494 - AT - Central Excise

Summary

Issues: Classification of captively consumed item, Benefit of Notification No. 67/95-C.E., dated 16-3-1995

In this case, the appellants, who are manufacturers of Filter Inserts, also produce Banian Cloth and Sleeve for captively consumed use in the manufacture of Filter Inserts. The department initiated re-classification proceedings for the captively consumed Banian Cloth under a different chapter sub-heading despite previous directions to classify it differently. The appellants claimed the benefit of Notification No. 67/95-C.E., dated 16-3-1995 for captive consumption but faced resistance from the Revenue. The Commissioner (Appeals) upheld the re-classification under a specific chapter sub-heading, citing relevant circulars and precedents. The Tribunal considered arguments on classification under different sub-headings and the applicability of the mentioned Notification. After detailed analysis, the Tribunal concluded that the benefit of the Notification should be extended to the appellants as the captively consumed goods met the criteria without falling under exclusion clauses. The appeal was allowed, confirming the classification and granting the benefit of the Notification to the appellants.

The first issue addressed was the classification of the captively consumed item. The department sought re-classification under a specific chapter sub-heading despite previous instructions to classify it differently. The appellants argued for a different classification under Chapter sub-heading 6001.11 of the CET. However, the Commissioner (Appeals) upheld the classification under Chapter sub-heading 5911.40 based on relevant circulars and precedents. The Tribunal considered these arguments, along with technical opinions and explanatory notes under HSN, before confirming the classification as held by the authorities below.

The second issue focused on the benefit of Notification No. 67/95-C.E., dated 16-3-1995. The appellants claimed this benefit for captive consumption of the Banian Cloth and Sleeve used in Filter Inserts manufacturing. The Tribunal carefully examined the Notification and found that it applied to captively consumed goods without falling under any exclusion clauses. After due consideration, the Tribunal concluded that the benefit of the Notification should be extended to the appellants, as there was no dispute regarding the captively consumed nature of the items. Therefore, the appellants were deemed entitled to the benefit of the Notification, and the appeal was allowed on these grounds.