2012 (11) TMI 1017 - AT - Central Excise

Duty demand - Denial of benefit of Notification No. 67/1995 - appellants were availing the Notification in respect of molasses which are used in the manufacture of denatured alcohol - Held that - There is no evidence on record that the appellant cleared rectified alcohol without payment of duty during the period of dispute. The whole quantity of molasses used in the manufacture of denatured alcohol which is cleared on payment of duty - benefit of Notification No. 67/95-CE is available in respect of the castings which were further used in the manufacture of glass bottles. The Revenue wants to deny the benefit of the Notification on the ground that castings which are used in the manufacture of moulds are exempt from payment of duty - Following decision of Haldyn Glass Ltd, vs. CCE reported in 2005 (4) TMI 143 - CESTAT, MUMBAI - Decided in favour of assessee.

Summary

Issues:
1. Denial of benefit of Notification No. 67/95 for molasses consumed in the manufacture of denatured Ethyl Alcohol.
2. Time-barring of the demand.
3. Merits of the case regarding the applicability of the notification and duty liability on molasses.

Analysis:
1. The appeal challenged the confirmation of a demand of Rs.1,14,60,000/- along with interest and penalty under Section 11AC of the Central Excise Act due to the denial of the benefit of Notification No. 67/95 for molasses used in producing denatured Ethyl Alcohol. The appellant claimed the molasses were captively consumed in alcohol production, cleared after duty payment. The Revenue contended that as rectified alcohol, an exempted product, was produced during alcohol manufacturing, the appellant was not entitled to the notification's benefit.

2. The appellant argued that the demand was time-barred, citing previous Show Cause Notices dropped by the Additional Commissioner in 1998. They claimed that as those proceedings were not challenged, there was no intent to evade duty payment. However, the extended period was invoked for the demand from March 2000 to May 2001 based on suppression.

3. The Tribunal analyzed the case, considering precedents like CCE vs. Hindustan Sanitaryware & Industries and Haldyn Glass Ltd. It was established that the benefit of Notification No. 67/95 was available for inputs used in further manufacturing processes. The Tribunal found no evidence of duty evasion by the appellant and ruled in their favor, setting aside the impugned order and allowing the appeal based on the settled legal principles regarding the notification's applicability to captive consumption scenarios.