2013 (1) TMI 146 - AT - Central Excise

Waiver of pre-deposit - Stay of recovery - Common input - Maintenance of separate accounts of inputs - Eligibility for exemption - Supplies made under international competitive bidding - Rule 6 of the CENVAT Credit Rules, 2004 - Manufacturers of copper cables - Notification No.6/2006-CE dt. 01/03/2006 - Notification No.67/95-CE dt. 16/03/1995 - Manufacturing both dutiable and exempted final products - Held that - Prima facie, when goods are cleared without payment of duty under Notification No.6/2006-CE, the Rule 6(6) of CCR stipulates that provisions of sub-rules(1),(2),(3)and(4) shall not be applicable. Therefore, the requirements of maintenance of separate accounts of inputs going into the manufacture of exempted products etc. do not arise. We have not been shown that the appellants have failed in fulfilling any obligation in terms of Rule 6 of the CCR, 2004. Waive Pre-deposit. Stay granted. In favour of assessee

Summary

Issues:
Manufacture of dutiable and exempted products, Compliance with Rule 6 of CENVAT Credit Rules, Exemption eligibility under Notification No.67/95-CE.

Manufacture of dutiable and exempted products:
The appellants, manufacturers of copper cables, supplied cables under international competitive bidding, treated as exempted products. The Department alleged the appellants failed to prove compliance with Rule 6 of CCR, denying exemption for clearances of copper wire used in cables supplied under Notification No.6/2006-CE. The advocate argued that as the cables supplied under bidding were fully exempted, Rule 6(6) of CCR exempts them from certain obligations, seeking waiver of dues predeposit.

Compliance with Rule 6 of CENVAT Credit Rules:
The Department contended that manufacturers of dutiable and exempted products have a positive obligation under Rule 6 of CCR, which the appellants failed to fulfill. The Additional Commissioner argued that non-compliance with Rule 6 implies non-compliance with conditions of Notification No.67/95-CE. However, the Tribunal found no evidence of the appellants failing to meet obligations under Rule 6, concluding that they are eligible for exemption under the notification.

Exemption eligibility under Notification No.67/95-CE:
The Tribunal, after considering submissions from both sides and reviewing records, noted that under Rule 6(6) of CCR, certain provisions do not apply when goods are cleared without duty payment under Notification No.6/2006-CE. As the appellants were not shown to have failed in meeting obligations under Rule 6, the Tribunal found no violation of condition (vii) of Notification No.67/95-CE. Consequently, the Tribunal waived pre-deposit of dues and stayed recovery pending appeal disposal.