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2013 (10) TMI 561 - AT - Central ExciseBenefit of Notification No.67/95 Captive consumption - benefit claimed for goods supplied under ICB - Waiver of Pre-deposit - Goods cleared without payment of duty as per Notification No.6/2006 against International Competitive Bidding - Whether the benefit of notification No.67/95-CE would be available to aluminium slabs which have gone into the manufacture of aluminium sheets Held that - If the goods are cleared against International Competitive Bidding in terms of Notification No.6/2006 the provisions of sub-rules (1), (2), (3) (4) of Rule 6 shall not be applicable to the clause (vi) of Rule 6 - no reversal of credit is required - If that be so, the condition of Notification No.67/95-CE requiring discharge of obligation in terms of Rule 6 of Cenvat Credit Rules stands fulfilled - the appellant is not required to pay any percentage prescribed under the law on the value of exempted final products - Prima facie, the benefit of notification No.67/95 is available to the appellant. Relying upon Thermo Cables vs. CCE, Hyderabad 2013 (1) TMI 146 - CESTAT BANGALORE and BHEL vs. CCE, Trichy 2012 (10) TMI 105 - CESTAT, CHENNAI - the goods cleared against International Competitive Bidding in terms of Notification No.6/2006 prima facie are covered under exception to Rule 6 of Cenvat Credit Rules, 2001 - As such, the benefit of notification 67/95-CE could not be denied on the ground of no compliance with the conditions prescribed in clause (vi) of that proviso Condition of Pre-deposit of Duty and Penalty to be waived till the disposal Stay granted.
Issues:
Interpretation of Notification No.67/95-CE dated 16.3.95 regarding exemption for captively used goods in manufacturing final products cleared on duty payment. Applicability of the notification to aluminum slabs used in manufacturing aluminum sheets cleared without duty payment under Notification No.6/2006 against International Competitive Bidding. Analysis: The appellant, engaged in manufacturing aluminum sheets, also produces aluminum slabs for captive use in manufacturing sheets. The issue revolves around the interpretation of Notification No.67/95-CE, which exempts goods used captively in manufacturing final products cleared on duty payment. The Revenue contended that since some aluminum sheets were supplied without duty payment to Mega Power Projects under Notification No.6/2006, the appellant is not entitled to the benefit of captive consumption under Notification No.67/95-CE. This led to duty demands and penalties imposed on the appellant. Upon examination, it was found that the benefit of Notification No.67/95-CE is available to manufacturers producing both dutiable and exempted final products, provided they comply with Rule 6 of the Cenvat Credit Rules, 2001. Rule 6 mandates maintaining separate records for inputs or paying a percentage of exempted final product value. However, an exception exists for goods cleared without duty payment in specified cases, such as International Competitive Bidding under Notification No.6/2006. This exception exempts manufacturers from certain provisions of Rule 6, ensuring no reversal of credit is required, thus fulfilling the conditions of Notification No.67/95-CE. Moreover, previous Tribunal decisions in similar cases supported the appellant's stance, emphasizing that goods cleared under International Competitive Bidding are covered under exceptions to Rule 6 of Cenvat Credit Rules, thereby upholding the applicability of Notification No.67/95-CE. Consequently, the Tribunal ruled in favor of the appellant, dispensing with the pre-deposit of duty and penalties, and staying the recovery of the same. Both stay petitions were allowed based on the above analysis. This detailed analysis of the judgment highlights the intricate legal interpretation of notifications, rules, exceptions, and precedents that played a crucial role in determining the appellant's entitlement to the exemption under Notification No.67/95-CE for the aluminum slabs used in manufacturing aluminum sheets cleared without duty payment against International Competitive Bidding.
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