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2017 (8) TMI 1162 - AT - Central ExciseCENVAT credit - the final products namely forgings and dies manufactured by them were cleared on payment of duty as well as under exemption to Heavy Vehicles Factory, Avadi in terms of N/N. 70/92 dated 17.6.1992 - non-maintenance of separate set of books - Held that - In similar case, where the goods were cleared to M/s. Space Centre and M/s. Baba Atomic Research Centre in the case of DCW Ltd. 2008 (10) TMI 380 - MADRAS HIGH COURT , the jurisdictional High Court has considered that the said goods cannot fall under the category of exempted goods as provided in Rule 57CC(1) of the erstwhile CER, 1944 - appeal allowed - decided in favor of appellant.
Issues:
Duty demand on appellants for clearing forgings and dies to Heavy Vehicles Factory under exemption benefit. Analysis: The appellants, engaged in manufacturing steel forgings and dies, were availing credit on inputs. A show cause notice alleged that the final products cleared to Heavy Vehicles Factory were both dutiable and exempted under Notification No. 70/92. The original authority dropped the duty demand but imposed a penalty. On appeal, the Commissioner confirmed the duty demand but set aside the penalty. The appellants contended that they only cleared dutiable products, with a small percentage under the exemption notification. They argued that the goods cleared did not qualify as exempted products. Citing relevant case law, they asserted that the duty demand was unsustainable. The department argued that since the goods were cleared under the exemption notification to Heavy Vehicles Factory, they were exempted, making the appellants liable to pay 8% of the value of the exempted goods. The Tribunal considered the judgments cited by the appellant's counsel, which held that goods cleared to certain entities under exemption notifications did not qualify as exempted goods under Rule 57CC of the Central Excise Rules, 1944. Relying on these precedents, the Tribunal concluded that the duty demand on the appellants was unsustainable. In light of the above analysis, the Tribunal set aside the impugned order and allowed the appeal, providing consequential relief as necessary.
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