2012 (8) TMI 410 - AT - Central Excise

Captive Consumption - benefit of Notification No.67/95-CE dated 16.03.1995 - denial - assessee engaged in the manufacture of sponge iron and steel billets out of the sponge iron, had taken separate registration for these commodities, though manufactured in the same factory premises but located at different parts in the said factory premises - issue decided against appellant in remand proceedings - Held that - Even though both these units are having separate Central Excise registration, but being situated in the same factory premises, the benefit of exemption Notification No.67/95-CE cannot be denied to the sponge iron manufactured in one unit and consumed in the manufacture of billets in another unit. Consequently, the order of the Commissioner is set aside and the appeal of appellant is allowed

Summary

Issues:
- Interpretation of Notification No.67/95-CE dated 16.03.1995 for captive consumption of sponge iron used in the manufacture of billets in the same factory premises.

Analysis:
1. The appellant, engaged in manufacturing sponge iron and steel billets in the same factory premises, filed an appeal against an order alleging under-valuation of sponge iron used in the production of steel billets.

2. The appellant argued for the benefit of Notification No.67/95-CE, citing cases supporting their position. The Revenue reiterated the findings of the adjudicating authority.

3. The central issue was whether the appellant could claim the benefit of the notification for captive consumption of sponge iron in the manufacture of billets within the same factory premises. Both units had separate registrations but operated within the same factory.

4. The Tribunal considered the definition of "factory" under the Central Excise Act and previous cases to determine that the units within the same premises should be treated as one factory for the purpose of the notification.

5. The Tribunal's decision was upheld by the Hon'ble Supreme Court, emphasizing that separate registrations do not negate the applicability of the notification when units are in the same factory premises.

6. Consequently, the order of the Commissioner was set aside, and the appeal was allowed, granting the appellant the benefit of the notification for captive consumption of sponge iron in the production of billets within the same factory premises.