2017 (12) TMI 1295 - AT - Central Excise

Intermediate goods - Ceramic Tiles used captively for manufacture of final product i.e. bends/pipes etc which were exempted from duty uptill clearance of value of Rs. One Crore - Held that - we find that no verification of the fact whether Ceramic Tiles manufactured by the appellant was carried out and demand was against confirmed only on the ground that no documentary evidence was produced - As per above notification, the goods manufactured and captively used which is other than Ceramic Tiles are exempted even for captive use as per the entry Sr. No. (2) of the table of the N/N. 8/03-CE - appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
Denial of exemption notification No. 8/2003-CE for intermediate goods used in the manufacture of final products.

Analysis:
The case involved a dispute where the lower authorities denied the exemption notification No. 8/2003-CE for intermediate goods, specifically Ceramic Tiles, used in the manufacture of final products. The appellant claimed they never manufactured Ceramic Tiles but produced other Ceramic products consumed in the manufacturing process. The Commissioner(Appeals) remanded the matter to the adjudicating authority for verification. However, in the subsequent denial, the adjudicating authority failed to verify whether Ceramic Tiles were manufactured by the appellant, leading to the repetition of the same order without proper investigation.

Upon careful consideration of submissions, it was observed that no verification was conducted to confirm the manufacturing of Ceramic Tiles by the appellant. The adjudicating authority did not make any effort to verify the facts, either through document verification or a factory visit. Consequently, the claim of the appellant that they did not manufacture Ceramic Tiles was accepted. Since Ceramic Tiles were not manufactured and used captively, the demand for duty was deemed baseless, as goods other than Ceramic Tiles under Chapter 69 were exempted under the notification No. 8/2003-CE.

The notification provided exemption for goods, other than Ceramic Tiles, used as inputs for further manufacturing within the factory. As per the provisions, the demand raised and upheld by the Commissioner(Appeals) was deemed unsustainable. Therefore, the impugned order was set aside, and the appeal was allowed in favor of the appellant.

In conclusion, the judgment highlighted the importance of proper verification by the adjudicating authority to ascertain the facts before denying exemptions. The case emphasized adherence to the provisions of the notification and the necessity for due diligence in verifying claims made by the parties involved in excise duty matters.