2017 (5) TMI 394 - AT - Central Excise

Benefit of N/N. 6/2002-CE dated 1.3.2002 - clearance of vibration isolation systems - denial of benefit on the ground that the impugned item can be considered as parts of waste convention devices producing energy - Held that - the same issue pertaining to the same appellant has come before the Tribunal in an earlier case GERB VIBRATION CONTROL SYSTEMS (P) LTD. Versus COMMR. OF C. EX., BANGALORE 2007 (10) TMI 180 - CESTAT, BANGALORE for a different period which stands decided against the appellant, where it was held that item 21 of list 9 of N/N. 6/02 indicates that the exemption is available only for captive consumption. Tribunal cannot ignore such condition stipulated in notification so exemption not available - appeal dismissed - decided against appellant.

Summary

Issues:
1. Benefit of Notification No.6/2002-CE availed by the appellant for clearing vibration insulation systems without duty payment.
2. Interpretation of whether the goods were consumed within the factory of production as per the notification.
3. Applicability of the exemption under item 21 of list 9 of the notification for parts consumed within the factory of production.

Analysis:
1. The appellant, engaged in manufacturing goods falling under Chapter 84 of the Central Excise Tariff Act, availed the benefit of Notification No.6/2002-CE to clear vibration insulation systems without paying duty. The Revenue sought to disallow this benefit, leading to the present appeal against the Order-in-Appeal No.401/2003-CE dated 31.12.2003.

2. The main contention revolved around whether the goods were consumed within the factory of production, as required by the notification. The appellant supplied vibration control systems to customers for a biomass-based power project. The Tribunal referred to a previous case involving the same appellant and held that the exemption could not be denied solely based on the location of consumption, citing relevant case law and principles of interpretation.

3. The appellant claimed exemption under item 21 of list 9 of the notification for parts consumed within the factory of production. However, the Tribunal noted that the goods were supplied to other units, not for captive consumption. Despite the goods being part of waste conversion devices for energy production, the condition of consumption within the factory of production was not met. The Tribunal emphasized that the exemption was intended for captive consumption only, leading to the dismissal of the appeal based on the strict interpretation of the notification.

Conclusion:
The Tribunal upheld the impugned order, dismissing the appeal due to the failure to meet the condition of consumption within the factory of production as stipulated in the exemption notification. The decision highlighted the importance of strict interpretation of such notifications and the limitations on availing exemptions for goods supplied to entities outside the factory of production.