2017 (6) TMI 44 - AT - Central Excise

Benefit of N/N. 6/2000-CE dated 1.3.2000 - vibration insolation systems - denial of benefit on the ground that the benefit claimed by the appellant is allowable only when the parts required for non-conventional energy devices are consumed within the factory of production of such parts for the manufacture of main equipments - In the present case, the goods manufactured in the appellant factory have been supplied to M/s. Roshni Power Tech Ltd., who in turn utilised such goods in the manufacture of non-conventional energy systems. Held that - the same issue pertaining to the same appellant has come before the Tribunal in an earlier case for a different period GERB VIBRATION CONTROL SYSTEMS (P) LTD. Versus COMMR. OF C. EX., BANGALORE 2007 (10) TMI 180 - CESTAT, BANGALORE , where it was held that item 21 of list 9 of not. 6/02 indicates that the exemption is available only for captive consumption, tribunal cannot ignore such condition stipulated in notification so exemption not available - benefit rightly denied. Appeal dismissed - decided against appellant.

Summary

Issues:
1. Benefit of Notification No.6/2000-CE dated 1.3.2000 for clearance of goods without payment of duty.
2. Interpretation of the condition of notification regarding consumption of parts within the factory of production.
3. Applicability of exemption under item 21 of list 9 for parts consumed within the factory of production.

Analysis:

1. The appeal challenged the Order-in-Appeal No.67/2003 dated 31.3.2003, where the appellant, engaged in manufacturing goods falling under Chapter 84 of the Central Excise Tariff Act, cleared vibration isolation systems without duty payment under Notification No.6/2000-CE dated 1.3.2000. While the Order-in-Original set aside the demand, the Commissioner (A) held that central excise duty was payable on the goods. The issue revolved around the disallowance of the benefit claimed under the said Notification, leading to the present appeal.

2. The appellant claimed the benefit under Notification No.6/2000 dated 1.3.2000 for supplying vibration control systems to a customer involved in setting up a biomass-based power project. The dispute arose as the goods manufactured by the appellant were utilized by the customer in the production of non-conventional energy systems, questioning the consumption of parts within the factory of production as required by the notification. The Tribunal referred to a previous case involving the same appellant, where a similar issue was addressed favorably for the appellant, emphasizing the interpretation of consumed within the factory of production.

3. In a separate instance, the appellant supplied goods for a non-conventional renewable power project, seeking exemption under item 21 of list 9 of a notification. The Tribunal deliberated on the condition that parts should be consumed within the factory of production to avail the exemption, highlighting that the government's stipulation made it challenging for manufacturers supplying goods to other units to benefit from the exemption. Despite arguments from the appellant, the Tribunal upheld the impugned order based on the strict interpretation of the notification condition, resulting in the dismissal of the appeal.

In conclusion, the Tribunal upheld the impugned order in both instances, emphasizing the strict interpretation of the conditions specified in the notifications regarding the consumption of parts within the factory of production to avail of the claimed benefits. The decisions highlighted the importance of adherence to the prescribed criteria for exemptions under the Central Excise Tariff Act, ultimately leading to the dismissal of the appeals.