2017 (1) TMI 604 - AT - Central Excise

Captive consumption - Dolochar - production of electricity - benefit of N/N. 67/95 CE 06.03.1995 - Held that - the subject matter is covered by Tribunals decision in the case of HEG Ltd. 2011 (11) TMI 553 - CESTAT NEW DELHI , where it was held that if no duty of excise is leviable on Char/Dolochar, these cannot be exempted under section 5A of the Central Excise Act, 1944 as only those goods can be exempted which are chargeable to duty of excise - the items Char/Dolchar are not manufactured or excisable goods - appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against denial of exemption benefit under Notification No. 67/95 CE 06.03.1995 on Dolochar captively consumed for electricity production.

Detailed Analysis:
The appellant, a company, filed appeals against the denial of exemption benefit under Notification No. 67/95 CE 06.03.1995 on Dolochar used for electricity production. The appellant argued that Dolochar is a byproduct of their manufacturing process and not a manufactured good subject to excise duty. The Department contended that the appellant removed Dolochar to their Power Plant without paying excise duty, affecting their eligibility for Cenvat credit. Penalties were imposed, and demands were confirmed under the Cenvat Credit Rules, 2004 and the Central Excise Act, 1944.

The appellant's advocate highlighted that previous orders had established that Char/Dolochar are not manufactured goods, and therefore, no excise duty is leviable on them. They argued that since no duty is payable on Char/Dolochar, they cannot be exempted under section 5A of the Central Excise Act, 1944. The advocate also emphasized that the change in the definition of excisable goods from 10.05.2008 did not alter the non-excisable nature of Char/Dolochar. They further contended that the removal of Char/Dolochar to the Power Plant, not being exempted goods, does not fall under Rule 6(1) of the Cenvat Credit Rules, 2004, rendering the demands unsustainable.

The Revenue, represented by the Ld. AR, supported the findings in the impugned order. After considering the submissions, case laws, and facts presented by both parties, the Tribunal referred to previous decisions and observed that Dolochar cannot be considered a manufactured or excisable product. Citing relevant legal precedents, including a Supreme Court decision and a CESTAT ruling, the Tribunal concluded that Char/Dolochar are not excisable goods. Consequently, the impugned order denying the exemption benefit was set aside, and the appeals were allowed in favor of the appellant.

In conclusion, the Tribunal found in favor of the appellant, ruling that Char/Dolochar are not subject to excise duty and are not considered manufactured or excisable goods. The decision was based on legal interpretations and precedents, leading to the setting aside of the impugned order and granting consequential relief to the appellant.