2017 (9) TMI 349 - AT - Central Excise

Clearance of inputs without payment of duty - whether the inputs on which Cenvat credit has been availed can be cleared without payment of duty against CT-3 Certificate under the exemption under N/N. 22/2003-CE dated 31/03/2013? - Held that - inputs received in factory on which Cenvat credit has been availed can be cleared without payment of duty against CT-3 Certificated under the benefit of N/N. 22/2003-CE dated 31/03/2013 - Tribunal in the case of Matrix Laboratories Ltd. 2014 (6) TMI 685 - CESTAT BANGALORE has very clearly observed that the inputs can be considered as excisable goods and the clearance of the same can be placed on par with clearance of excisable goods and also held that clearance of the said goods under Rule 19(2) of Central Excise Rules provided for clearance of goods without payment of duty irrespective of the fact that they were manufactured by the assessee or otherwise - appeal allowed - decided in favor of appellant.

Summary

Issues:
Whether inputs on which Cenvat credit has been availed can be cleared without payment of duty against CT-3 Certificate under Notification No. 22/2003-CE dated 31/03/2013.

Analysis:

The judgment involves two appeals directed against a common Order-in-Appeal passed by the Commissioner of Central Excise & Service Tax. The appellants were involved in the manufacture of Electronic Parts, with one having a 100% EOU status. The dispute arose when one appellant supplied inputs to the other against a CT-3 Certificate, leading to a Show Cause Notice proposing recovery of Cenvat credit and penalties. The Original Authority disallowed the Cenvat credit and imposed penalties, a decision upheld by the Commissioner (Appeals) in the impugned Order-in-Appeal.

The main issue revolved around whether inputs with availed Cenvat credit could be cleared without payment of duty under Notification No. 22/2003-CE. The Revenue contended that only manufacturers could clear goods to 100% EOU under this notification. However, the Tribunal referred to a previous case involving Matrix Laboratories Ltd., where it was held that inputs could be treated as excisable goods and cleared without duty payment under Rule 19(2) of Central Excise Rules, irrespective of whether they were manufactured by the assessee.

After considering the arguments and precedents, the Tribunal ruled in favor of the appellants. It held that inputs with availed Cenvat credit could indeed be cleared without payment of duty against a CT-3 Certificate under the benefit of Notification No. 22/2003-CE. The Tribunal set aside the impugned Order-in-Appeal and allowed both appeals, granting the appellants consequential relief as per law.

This judgment clarifies the interpretation of rules regarding the clearance of goods against CT-3 Certificate and the eligibility of inputs with Cenvat credit for such clearance. It emphasizes the broader understanding that inputs can be treated as excisable goods and cleared without duty payment, aligning with previous Tribunal decisions and High Court affirmations.