2018 (9) TMI 1425 - AT - Central Excise

CENVAT Credit - demand of 10% of the price of the exempted goods - appellants were clearing their final products for home consumption partly on payment of duty and partly without payment of duty while claiming benefit of exemption Notification No.6/2006-CE dated 01.03.2006 as amended. Held that - An identical issue has been considered by the Tribunal in the case of Commissioner of Central Excise vs. Bharat Heavy Electricals Ltd. 2015 (7) TMI 225 - CESTAT NEW DELHI . It was observed that the Department s contention that Clause (vii) of Rule 6(6) would not be applicable to goods manufactured in India and would be applicable only to the imported goods is absurd as Clause (vii) of Rule 6(6) has to be read alongwith provision of Rule 6(6) and cannot be interpreted in isolation. It is also noted that their goods have been supplied under International Competitive Bidding and M/s ABB Ltd., were awarded a contract by DMRC for supply of various items. In support, certificate of DMRC and certificate of ABB Ltd., have been produced on record and in fact are not disputed by the Revenue - The fact that the clearances were made in terms of Notification No.6/2002-CE dated 01.03.2002 do not stands disputed by the Revenue. In that scenario the benefit of Rule 6(6)(vii) has to be extended to the assessee and no demand can be confirmed against them. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Classification of goods under Central Excise Tariff Act, 1985.
2. Availing Cenvat credit facility and exemption benefits.
3. Interpretation of Rule 6(6)(vii) of Cenvat Credit Rules, 2004.
4. Applicability of Notification No.6/2006-CE and Notification No.21/2002-Cus.
5. Supply of goods for International Competitive Bidding projects.
6. Legal precedent regarding similar issues.
7. Disputed clearances under Notification No.6/2002-CE.

Analysis:

1. The appellant, engaged in manufacturing steel structures, faced a show cause notice for clearing products partly with and without duty, claiming exemption under Notification No.6/2006-CE. The Commissioner confirmed a demand, interest, and penalty, leading to the appeal.

2. The appellant argued that Rule 6(6)(vii) of the Cenvat Credit Rules should apply due to supplying goods to ABB Ltd. for a DMRC project, supported by certificates. They contended that the exemption under Notification No.6/2006-CE should apply, emphasizing the correct classification under the notification.

3. The Tribunal referred to a previous case, clarifying that Rule 6(6)(vii) is not limited to imported goods, rejecting the Revenue's argument. This decision favored the appellant's interpretation of the rule in their case.

4. Certificates from DMRC and ABB Ltd. confirmed the supply for International Competitive Bidding projects, aligning with legal precedents where exemptions were granted based on project execution specifics. The Tribunal highlighted similar cases supporting the appellant's claim.

5. The Tribunal noted undisputed clearances under Notification No.6/2002-CE, indicating the applicability of Rule 6(6)(vii) to the appellant. Consequently, the impugned orders were set aside, allowing the appeal with relief to the appellant.

This judgment resolved issues related to classification, exemption benefits, rule interpretation, and project-specific supply, aligning with legal precedents and specific notifications to grant relief to the appellant based on the facts and applicable laws.