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2016 (12) TMI 1452 - AT - Central ExciseDuty on intermediate goods - Phosphoric Acid - manufacture of Sodium Tripoly Phosphate (STPP) and cleared without payment of duty under N/N. 49/94-CE(NT) dt. 22.9.1994 - demand of duty on intermediate product on the ground that the final product is exempted from whole of the duty of excise - Held that - the appellant have cleared the final product against CT-2 certificate issued by the buyer of the goods in terms of N/N. 49/94-CE (NT). As per this notification the goods supplied by the appellant is meant for use in the export goods - from the conditions of notification it is clear that the goods supplied by the appellant is meant for use in the export goods. Moreover the supplies under N/N. 49/94-CE(NT) is against the advance licence to the holder of the advance licence. This supplies are also treated as deemed export in terms of Export and Import Policy. For all this reasons the supplies made by the appellant under bond which is meant for use in the export goods cannot be treated at par with the non duty paid goods or exempted goods. The final product supplied by the appellant against CT-2 certificate cannot be treated as nil duty or exempted goods. In such a case the intermediate goods will be entitled for N/N. 67/95-CE hence the demand on the intermediate product i.e. phosphoric acid is not tenable - appeal allowed - decided in favor of appellant-assessee.
Issues:
Demand of excise duty on intermediate product - Phosphoric Acid used in the manufacture of Sodium Tripoly Phosphate (STPP) under Notification No. 49/94-CE(NT) - Applicability of Notification No. 67/95-CE on intermediate goods - Invocation of extended period for demand - Quantification of duty based on assumption - Interpretation of conditions under Notification No. 49/94-CE(NT) for export goods. Analysis: The case involved the appellant manufacturing STPP and clearing it under Chapter X Procedure without duty payment. A show cause notice was issued for demanding excise duty on the intermediate product, Phosphoric Acid, used in manufacturing STPP, citing that Notification No. 67/95-CE did not apply due to the final product's duty exemption. The demand was upheld by the Commissioner, leading to the appeal. The appellant's counsel argued that the case aligns with a previous Tribunal judgment where goods were cleared under an Exemption Notification for export use. They contended that as the goods were cleared against a CT-2 certificate for export use, the intermediate goods should remain exempt under Notification No. 67/95-CE. The counsel also challenged the invocation of the extended period for demand and the arbitrary quantification of duty based on assumptions. On the contrary, the Revenue's Assistant Commissioner argued that since the final product was cleared without duty payment, the exemption for intermediate goods did not apply. They relied on previous judgments to support their stance. The Tribunal analyzed the conditions of Notification No. 49/94-CE(NT) and concluded that the goods supplied by the appellant were meant for use in export goods. They referenced a previous case to support their decision, stating that goods supplied under bond for export use cannot be treated as duty-exempt goods. Therefore, the final product supplied against a CT-2 certificate should not be considered exempt, making the demand on the intermediate product unjustified. The impugned order was set aside, and the appeal was allowed. In conclusion, the Tribunal's decision was based on the interpretation of Notification conditions and the alignment of the case with previous judgments, ultimately ruling in favor of the appellant and rejecting the demand for excise duty on the intermediate product.
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