2018 (2) TMI 204 - AT - Central Excise

Benefit of N/N. 67/95-CE - intermediate goods namely HDPE / PP tapes or strips used in manufacture of final products, PP woven socks / fabrics - denial on the ground that appellants have availed exemption from payment of duty from whole of excise duty under N/N. 8/2003-CE for clearance of their final products? - Held that - issue covered by the decision in the case of Parvenu Industries Ltd. 2017 (5) TMI 135 - CESTAT CHENNAI , wherein it was held that final products are neither exempt nor subject to Nil rate of duty by virtue of the appellant s status as SSI, whose clearances were otherwise dutiable, accordingly they would not be hit by barring clauses of N/N. 67/95-CE for the intermediate products in question. The strips of plastics etc. (inputs) cleared for captive consumption in the manufacture of final products in all these cases would then be eligible for the benefit of exemption provided under N/N. 67/95-CE since the final products are otherwise dutiable but did not suffer duty only account of value based exemption for SSI unit. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Eligibility of exemption under Notification No.67/95-CE for intermediate goods availed by appellants based on SSI Exemption Notification No.8/2003-CE.

Analysis:
The dispute revolves around the eligibility of exemption for intermediate goods, specifically HDPE/PP tapes or strips used in manufacturing final products like PP woven socks/fabrics, under Notification No.67/95-CE. The appellants had availed SSI Exemption Notification No.8/2003-CE based on clearance value. The lower authorities argued that since the final products were exempt from excise duty under Notification No.8/2003-CE, the intermediate goods should be liable to excise duty as the final products were chargeable to 'Nil' duty.

During the hearing, the appellant's advocate referred to previous Tribunal decisions in favor of the appellant, such as Parvenu Industries Ltd. vs. CCE Tirunelveli and Anbu Garments and Others vs. CCE Coimbatore. These decisions supported the appellant's position that the final products were not exempt or subject to Nil duty due to their SSI status, thus the intermediate goods were not affected by the barring clauses of Notification No.67/95-CE.

The Tribunal examined the impugned orders and found that the issue had been settled in favor of the appellant in previous decisions. In the case of Parvenu Industries Ltd., it was established that the intermediate input used for manufacturing final products was not covered by the barring clauses of Notification No.67/95-CE. The Tribunal also cited the case of Anbu Garments & Others and the Supreme Court's decision in Ambuja Cement Ltd. vs. CCE Chandigarh to support the eligibility of exemption for intermediate goods cleared for captive consumption in the manufacture of final products.

Consequently, the Tribunal set aside the impugned orders and allowed all three appeals, providing consequential relief as per law. The judgment clarified that the intermediate goods would be eligible for exemption under Notification No.67/95-CE since the final products were dutiable but had not incurred duty due to the value-based exemption for SSI units.