2017 (11) TMI 1257 - AT - Central Excise

Captive consumption - denial of benefit of N/N. 67/95 CE - intermediate products, armoured cable - whether the appellants are liable to pay the duty on intermediate product i.e. armoured cable, which has been used for manufacture of power cables which is ultimately cleared on payment of duty in the open market and to Mega Power Projects without payment of duty? - Held that - identical issue decided in the case of M/s. KEI Industries Ltd., N Hashmi Versus Commissioner of Central Excise 2016 (12) TMI 532 - CESTAT NEW DELHI , where relying in the decision in the case of Thermo Cables Ltd. 2012 (12) TMI 942 - CESTAT BANGALORE wherein this Tribunal held that a conjoint reading of sub-rule (6) of Rule 6 of the CCR 2004 and clause (vi) under the proviso to N/N.67/95-CE ibid would show that the assessee s claim for exemption from payment of duty on copper wire under the Notification was not hit by the opening portion of the proviso to the Notification, held that assessee was not liable to pay CE duty on copper wire manufactured and captively used in the manufacture of insulated (power) cables in the factory during the material period. - appeal dismissed- decided against Revenue.

Summary

Issues:
- Interpretation of exemption notifications for power cable manufacturers.
- Liability to pay duty on intermediate products used in manufacturing final goods.
- Application of CENVAT Credit Rules and Notification No.67/95-C.E.
- Disputed period from 2009 to 2012.

Interpretation of Exemption Notifications:
The appellant, engaged in power cable manufacturing, cleared goods in the open market and to Mega Power Projects under specific exemptions. The issue revolved around whether duty was payable on intermediate products like armoured cables used in manufacturing final goods cleared with or without duty payment. The Tribunal referred to a similar case involving KEI Industries Ltd. and emphasized the conditions of the exemption notifications under which final products were cleared without duty payment.

Liability for Duty on Intermediate Products:
The Tribunal analyzed the provisions of Rule 6(6)(vii) of the CENVAT Credit Rules, 2004, regarding the liability for maintaining separate accounts for inputs used in dutiable and exempted final products. It was highlighted that if final products were cleared without duty payment under specific exemptions, the liability under Rule 6 did not apply. The Tribunal's decision in a previous case emphasized that the appellant was not liable to pay duty on intermediate products used in manufacturing final goods cleared under exemption notifications.

Application of CENVAT Credit Rules and Notification No.67/95-C.E.:
The Tribunal examined the scope of Notification No.67/95-C.E. concerning the exemption of inputs used in manufacturing final products within the same factory. The proviso to the notification specified exceptions where the benefit of exemption did not apply, including scenarios where final products were exempt from duty. The Tribunal clarified that the manufacturer, producing both dutiable and exempted final products, was entitled to the exemption for inputs used in manufacturing exempted final products.

Disputed Period 2009-2012:
The appeal was filed against the Order-in-Original dated 19.3.15 concerning the disputed period from 2009 to 2012. The Tribunal dismissed the Revenue's appeal, noting that a previous order setting aside the demand had already been issued. As a result, the Tribunal found no merit in the Revenue's appeal and upheld the decision to set aside the demands and penalties related to duty payment on intermediate products used in manufacturing insulated power cables.