2017 (2) TMI 1462 - AT - Central Excise

SSI Exemption - Fire Tenders - exempt goods for the purpose of grant of benefit under Notification No. 6/2002-C.E., dated 1-3-2002 to the appellant manufacturing special purpose motor vehicle using above goods, or not - HELD THAT - Fire Tenders came to the premises of the appellant is undisputedly manufactured by SSI enjoying duty exemption under the appropriate notification. SSI benefit is given to a SSI which manufactures excisable goods when its clearance does not cross the limit prescribed. That does not mean that SSI has sold duty free goods. The goods sold by SSI was dutiable goods but was exempt by virtue of exemption granted to it in terms of a notification. Therefore, the fire tender manufactured by SSI does not debar the appellant from the benefit of duty exemption vide Sl. No. 217 of the Notification No. 6/2002, dated 1-3-2002. Appeal allowed.

Summary

Issues:
Interpretation of duty exemption under Notification No. 6/2002-C.E. for special purpose motor vehicles manufactured using goods purchased from SSI enjoying duty exemption.

Analysis:
The appellant contended that "Fire Tenders" purchased from SSI, which were duty exempt, should be considered exempted goods for the purpose of claiming benefits under Notification No. 6/2002-C.E. The appellant argued that the exemption under the notification required the special purpose motor vehicle to be manufactured from chassis and equipment on which excise duty had already been paid. The appellant asserted that since the goods purchased from SSI were exempt from duty, they should still qualify for the notification's benefits. On the other hand, the revenue argued that the duty exemption enjoyed by the "Fire Tenders" from SSI did not automatically entitle the appellant to exemption under Notification No. 6/2002-C.E.

Upon hearing both sides and examining the records, the Tribunal found that the "Fire Tenders" received by the appellant were indeed manufactured by SSI under duty exemption. The Tribunal clarified that the duty exemption granted to SSI did not mean the goods were duty-free; rather, they were dutiable but exempted due to the notification. Therefore, the Tribunal concluded that the appellant was eligible for the benefit of duty exemption under Sl. No. 217 of Notification No. 6/2002-C.E. for manufacturing special purpose motor vehicles using the goods purchased from SSI. As a result, the appeal was allowed, and the appellant's interpretation of the duty exemption was upheld.