2014 (3) TMI 704 - AT - Central Excise

Demand of duty on intermediate products - captive consumption - Final product supplied under international competitive bidding to mega power projects. - Since final products were exempt under notification 6/06-CE (S.No.91), revenue denied exemption Notification 67/95-CE - Arguing for the applicant, learned advocate submits that as per notification No.67/95-CE, they are not required to pay excise duty in situations excluded in the second proviso to said notification. One of the exclusion clauses is in respect of goods for which obligation under rule 6 of Cenvat Credit Rules, 2004 is discharged. - Held that - Following decision of assessee s own previous case we grant waiver of pre-deposit of dues arising out of the impugned order for admission of appeal. Further there shall be stay on collection of such dues during pendency of appeal - Stay granted.

Summary

Issues:
1. Whether excise duty is payable on relays used in the manufacture of control panels exempted under notification 6/06-CE?
2. Interpretation of notification No.67/95-CE in relation to the obligation under rule 6 of Cenvat Credit Rules, 2004.

Analysis:
1. The case involved a manufacturer of electrical equipment facing a demand for excise duty on relays used in the manufacture of control panels exempted under notification 6/06-CE. The Revenue contended that excise duty should have been paid on relays used in the control panels due to the exemption. The applicant argued that under notification No.67/95-CE, they were not required to pay excise duty in situations excluded in the second proviso. The applicant relied on Rule 6 (6) (vii) of Cenvat Credit Rules, 2004, which states no reversal of credit is needed for goods supplied under Notification 6/06-CE against International Competitive Bidding. The Tribunal considered a previous stay order in the applicant's favor and granted waiver of pre-deposit of dues for admission of appeal, with a stay on collection during the appeal period.

2. The interpretation of notification No.67/95-CE was crucial in determining the applicability of excise duty on the relays used in the manufacturing process. The applicant argued that they had fulfilled the obligation under Rule 6 (6) (vii) of CCR 2004 by supplying goods under the specified notification, making them eligible for the exemption under notification 67/95-CE. The Revenue opposed this, stating that the exemption claimed through the interpretation of CCR 2004 was not warranted, and notification 67/95-CE should be strictly interpreted without involving indirect routes. The Tribunal, however, relied on a previous order in the applicant's case and granted relief by waiving the pre-deposit of dues and staying the collection during the appeal process.

This judgment highlights the importance of interpreting notifications and rules accurately to determine the applicability of excise duty exemptions in specific manufacturing scenarios, emphasizing the need for a thorough understanding of legal provisions in tax matters.