2015 (9) TMI 1262 - AT - Central Excise

Import of goods meant for granite quarry - whether Consumables and Tools - scope of the term consumables - 100% EOU - procurement of the items domestically in CT-3 - Eligibility of Exemption Notification No.58/2000-Cus. dt.8.5.2000 and Central Excise Notfn 37/2000-CE dt. 8.5.2000 - Held that - The description of items have been listed at Sl.No.1 to 29 which are permissible under the notification whereas Sl.No.30 allows consumables and tools . We are of the considered view that parts of excavator, button bits, tyres and tubes can by no stretch of imagination be considered as consumables. Therefore, appellants are not eligible for spares for excavators, tyres and tubes, button bits. Accordingly, we do not find any infirmity in the order of Commissioner (Appeals) and the same is upheld - Decided against assessee.

Summary

Issues:
- Eligibility of Exemption Notification No.58/2000-Cus. and Central Excise Notification 37/2000-CE.
- Interpretation of the term "consumables and tools" under the notifications.
- Applicability of exemption for items like button bits, spares for excavators, and tyres and tubes.
- Claim of credit by the appellant for spares and components used in the manufacturing process.

Analysis:
The appeal in this case was filed contesting the Commissioner (Appeals) order, specifically focusing on the denial of benefits under Central Excise Notification No.37/2000 and Customs Notification 58/2000 for items such as button bits, spares for excavators, and tyres and tubes. The appellant, registered as an EOU with Central Excise, faced demands for duty on various items and penalties. The Commissioner (Appeals) allowed exemptions for certain items but rejected credit for the disputed items. The appellant argued that being an EOU, they were entitled to credit for spares and components used in the production of exempted final products, citing similar exemptions under other notifications like 1/95 and 22/2003. The Revenue, on the other hand, contended that the disputed items did not qualify as consumables or tools under the relevant notifications, referencing a Supreme Court decision on the definition of "consumables."

The Tribunal analyzed the eligibility of the exemption notifications and the definition of "consumables and tools" under Notification 58/2000-Cus. and Central Excise Notification 37/2000-CE. It noted that while the Commissioner (Appeals) had allowed exemptions for various items and waived penalties, the denial was specifically for the items in question. The Tribunal observed that the notifications were tailored for the granite industry, providing a list of permissible items for exemption. The disputed items like button bits, spares for excavators, and tyres and tubes were not considered consumables under the notifications. Therefore, the Tribunal concluded that the appellant was not eligible for credit on these items, upholding the decision of the Commissioner (Appeals) and rejecting the appeal concerning the disallowance of credit for the disputed items.