2009 (2) TMI 643 - AT - Central Excise

Summary

Issues:
Appeal against Commissioner (Appeals) order regarding eligibility for concessional rate of duty for bulbs under Notification No. 10/2002 based on Cenvat credit taken on inputs like tungsten wire, Molywire, etc.

Analysis:

1. Issue of Eligibility for Concessional Rate of Duty:
The case involved a dispute over the eligibility of the appellant for concessional rate of duty on bulbs under Notification No. 10/2002. The appellant, a manufacturer of filaments and bulbs, had taken Cenvat credit on inputs like tungsten wire, Molywire, etc. The original authority held the appellant ineligible for the concessional rate due to this credit. However, the Commissioner (Appeals) allowed the appeal, stating that the appellant had not taken credit on nitrogen gas used for filling bulbs and had maintained separate accounts for exempted intermediate products. The Commissioner found the appellant's exemption under Notification No. 10/96 valid as the filaments were cleared captively for bulb manufacturing. The Commissioner's decision was based on the appellant's compliance with the notification conditions, as no credit was taken on inputs used in bulb production.

2. Interpretation of Intermediate Products and Exemption:
The Commissioner correctly determined that the filaments, as intermediate products, were cleared for use in bulb manufacturing. Despite being excisable, the filaments were exempted, leading to the appellant debiting 8% of the filament value due to common input Cenvat credit without separate accounts. The Commissioner's finding that no credit was taken on inputs for bulbs was legally sound. The judgment emphasized that since filaments and gas were inputs for bulbs and no duty credit was availed on these items, the notification condition was satisfied. Consequently, the judgment upheld the Commissioner's decision, emphasizing the excisable nature of intermediate products and their exemption status.

In conclusion, the Appellate Tribunal rejected the appeal, affirming the Commissioner (Appeals) order based on the appellant's compliance with notification conditions and the absence of duty credit on inputs used in bulb manufacturing. The judgment underscored the importance of maintaining separate accounts for exempted intermediate products and upheld the eligibility for concessional duty rate on bulbs under Notification No. 10/2002.