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2011 (10) TMI 82 - AT - Central ExciseCaptive consumption - exemption under notification no. 67/95 - the department took the view that the exemption availed by the assessee under Notfn.No.67/95 in respect of tops, yarn and grey fabrics manufactured by them and used/contained in the finished fabrics stock/WIP (which is now exempted under Notfn.No.30/04) is not available to them for captive consumption because the condition of the Notfn. No.67/95 requires the final goods to be dutiable for availing the exemption under this Notification. - Held that - since the appellants have opted for Notification No.30/04, the benefit of the Notification No.67/95 is not applicable to them on the inputs used in the manufacture of exempted final products. Relying on decision of Tribunal in case of Cheviot Co.Ltd. (2010 (3) TMI 537 - CESTAT, KOLKATA), we hold that they are not entitled to exemption under Notification 30/2004. - Decided against the assessee. Extended period of limitation - Held that - extended period has rightly been invoked in the show-cause notice by the department and since the appellants have failed to supply the quantity and value of the goods, the finding of the Commissioner that intent to evade payment of duty is proved and accordingly, the penalty under Sec.11AC of the Central Excise Act and interest payable under Sec.11AB is also upheld.
Issues Involved:
1. Whether the appellants are entitled to exemption on intermediate products under Notification No.67/95 dated 16.3.95 or alternatively under Notification No.30/04 dated 9.7.04. 2. Applicability of provisions of Section 11A of the Central Excise Act, 1944. 3. Validity of the demand under extended period of limitation. 4. Imposition of penalty and interest under Section 11AC and Section 11AB of the Central Excise Act, 1944. Issue-wise Detailed Analysis: 1. Entitlement to Exemption under Notification No.67/95 or Notification No.30/04: The appellants, manufacturers of excisable goods, availed exemption for captive consumption under Notification No.67/95 for intermediate products like tops, yarn, and grey fabrics until 8.7.2004. Post the 2004-05 budget, they opted for exemption for both final and intermediate products under Notification No.30/04 without availing input stage credit. The department contended that the exemption under Notification No.67/95 was not available since the final products became exempt under Notification No.30/04. The Tribunal held that Notification No.67/95 exempts inputs used within the factory provided the final products are not exempt from duty. Since the final products were exempt under Notification No.30/04, the benefit of Notification No.67/95 was not applicable. The Tribunal also referred to the Supreme Court decision in Kohinoor Mills, distinguishing it on the basis that Notification No.132/77 did not have an ineligibility condition like Notification No.67/95. The Tribunal concluded that the appellants were not entitled to the exemption under Notification No.67/95 once they opted for Notification No.30/04. 2. Applicability of Provisions of Section 11A: The appellants argued that Section 11A was not applicable as the assessment was correctly made and the demand arose due to a change in law. The Tribunal, however, upheld the applicability of Section 11A, stating that the demand was justified due to the violation of conditions under Notification No.67/95. 3. Validity of the Demand under Extended Period of Limitation: The appellants contended that the demand was time-barred as the show-cause notice was issued on 6.7.2005, whereas the relevant date would be prior to 9.7.2004. The department argued that the appellants failed to furnish required data on captive consumption despite multiple requests. The Tribunal found that the extended period was rightly invoked due to the appellants' failure to supply the necessary information, indicating an intent to evade duty. 4. Imposition of Penalty and Interest: The Tribunal upheld the imposition of penalty and interest under Sections 11AC and 11AB, respectively, citing the appellants' failure to comply with the conditions of Notification No.67/95 and the subsequent intent to evade duty. Conclusion: The appeal filed by the appellants was dismissed, and the Tribunal upheld the demand for duty, penalty, and interest. The cross-objections filed by the department were also disposed of accordingly.
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