2016 (11) TMI 632 - AT - Central Excise

Levy of duty - clinker - benefit of N/N. 67/95-CE dated 16.3.1995 - clinker, not a final product - the appellant is required to pay duty on clinker which has been captively consumed in the manufacture of final exempted product i.e. cement or not? - Held that - the clinker which has been captively consumed in the manufacture of final exempted product i.e. cement for manufacturing final products, duty is not payable on clinkers - the appellant is not required to pay duty on clinker - appeal allowed.

Summary

Issues:
Whether duty is payable on clinker captively consumed in the manufacture of final exempted products like cement.

Analysis:
The case involved an appeal against an order where the appellant, engaged in manufacturing clinker and cement, opted for duty payment exemption under Notification no. 50/2003-CE for OPC/PPC cement. The Revenue contended that clinker, not being the final product of the appellant, is not dutiable, leading to proceedings against the appellant. The main issue was whether duty is required on clinker used in manufacturing final exempted products. The Tribunal referred to a Supreme Court decision in the appellant's own case, where it was held that duty is not payable on clinker captively consumed in the manufacture of final exempted products like cement. Following this precedent, the Tribunal ruled in favor of the appellant, setting aside the impugned order and allowing the appeal with consequential relief.

This judgment clarifies the duty liability on clinker used in the manufacture of final exempted products like cement. The Tribunal's decision aligns with the Supreme Court's ruling in the appellant's previous case, establishing a precedent that duty is not payable on clinker consumed captively in the production of final exempted goods. This interpretation provides certainty to manufacturers regarding duty obligations on intermediate products like clinker when used in the production of exempted goods, ensuring compliance with relevant notifications and regulations.

The Tribunal's reliance on the Supreme Court's decision in the appellant's earlier case strengthens the legal position on duty liability for clinker used in manufacturing exempted products. By upholding the principle that duty is not applicable on clinker captively consumed in producing final exempted goods like cement, the Tribunal maintains consistency in interpreting tax laws and notifications. This judgment reinforces the importance of judicial precedents in resolving similar issues and upholding the clarity and uniformity of tax liabilities in such cases.

In conclusion, the Tribunal's judgment in this case provides a clear and definitive stance on the duty liability concerning clinker used in the manufacture of final exempted products such as cement. By following the Supreme Court's decision in the appellant's previous case, the Tribunal ensures consistency and adherence to legal principles, ultimately benefiting manufacturers by establishing a predictable framework for duty obligations on intermediate goods in the production process.