2008 (11) TMI 446 - AT - Central Excise

Summary

Issues:
1. Availability of exemption under Notification No. 16/2001-C.E. for CTD bars of iron and steel cleared to earthquake affected area of Gujarat.
2. Rejection of refund of duty debited under Rule 6 of the CENVAT Credit Rules.
3. Interpretation of Rule 6 regarding the requirement to debit 8% of the value of exempted goods when MODVAT credit is availed.

Analysis:

1. The judgment deals with the availability of exemption under Notification No. 16/2001-C.E. for the clearance of CTD bars of iron and steel to an earthquake-affected area. The appellant cleared the goods without producing the end-use certificate, leading to a show cause notice for duty demand. However, the demand was dropped as the certificates were later produced. The Tribunal upheld the decision and emphasized the importance of complying with the conditions of the exemption notification.

2. The appellant sought a refund of duty debited under Rule 6 of the CENVAT Credit Rules, which requires debiting 8% of the total price of exempted goods when MODVAT credit is availed. The adjudicating authority rejected the refund plea, stating that the show cause notice did not cover the refund issue. The Tribunal agreed with this reasoning, highlighting that the refund was not the subject matter of the original notice, and therefore, could not be considered.

3. The Tribunal analyzed the provisions of Rule 6 concerning the requirement to debit 8% of the value of exempted goods when MODVAT credit is utilized for inputs. The appellant argued for an exemption similar to supplies made to the United Nations under Notification No. 108/95-C.E. for clearances to earthquake-hit areas. However, the Tribunal clarified that it cannot equate clearances to the United Nations with those to disaster-stricken areas, as such decisions fall within the legislative domain. Therefore, the Tribunal rejected the appeal, emphasizing the distinction between different types of exemptions under the law.