2018 (11) TMI 670 - AT - Central Excise

Taxability/Excisability - residue arising during the course of manufacture - N/N. 67/95-CE dated 16.3.1995 - Held that - Tribunal in appellant own case BOMBAY DYEING & MFG. CO. LTD. VERSUS COMMISSIONER OF C. EX., RAIGAD 2011 (1) TMI 807 - CESTAT, MUMBAI has held that Since duty on DMT was paid, exemption to DMT-Residue was undisputedly available to the Appellants, during the disputed period - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Whether the residue from the manufacture of Dimethyl Terephthalate (DMT) is excisable.
2. Whether the appellants are entitled to the benefit of Notification No. 67/95-CE dated 16.3.1995 as amended.

Issue 1: Residue Excisability
The case involved the appeal against an order passed by the Commissioner of Central Excise (Appeals) regarding the excisability of the residue obtained during the manufacture of DMT. The appellants claimed the residue as non-excisable, but show-cause notices were issued demanding duty on the residue used in their boiler for steam generation. The main contention was whether the residue was a marketable commodity. The Tribunal, in a previous case of the appellant, held that the adjudicating authority failed to consider if the appellants were entitled to the benefit of specific notifications granting exemption for captive use. The Tribunal observed that the appellants were entitled to the benefit of the said notifications for the relevant period. It was emphasized that the adjudicating authority must ascertain the correct duty liability and classify the goods accurately to provide the benefit of exemption notifications, which was neglected in this case. The Tribunal referred to relevant legal precedents to support the appellants' entitlement to the benefit of notifications. Consequently, the Tribunal held that the appellants were entitled to the benefit of the exemption notifications, setting aside the impugned order and allowing the appeal.

Issue 2: Benefit of Notification No. 67/95-CE
The second issue revolved around whether the appellants were entitled to the benefit of Notification No. 67/95-CE dated 16.3.1995 as amended. The Tribunal, in the appellant's previous case, determined that the appellants were indeed entitled to the benefit of the said notification for the period from 20-3-90 till 2006. The Tribunal highlighted that the credit of Modvat duty paid on DMT-residue was available and could be utilized for duty payment on DMT, leading to a revenue-neutral situation. Additionally, the Tribunal cited legal judgments to support the appellants' right to claim benefits under notifications even at a later stage. The Tribunal emphasized that the adjudicating authority's failure to provide the benefit of exemption notifications to the appellants was a crucial oversight. Consequently, the Tribunal concluded that the appellants were entitled to the benefit of the exemption notifications, specifically mentioning Notification No. 67/95-CE. The impugned order was set aside, and the appeal was allowed based on the precedent established in the appellant's prior case.

This detailed analysis of the judgment highlights the key issues of excisability of residue from DMT manufacture and the entitlement of the appellants to the benefit of specific exemption notifications. The Tribunal's decision was based on legal precedents and the failure of the adjudicating authority to consider the appellants' eligibility for exemption notifications, ultimately leading to the allowance of the appeal.