2017 (2) TMI 375 - AT - Central Excise

Exemption N/N. 6/2002-CE dated 1-3-2002 - Insulated Wires and Cables - Held that - it is absolutely clear that under the provision of Consessional Duty Rules, 2000 the recovery of duty shall be made only from the user manufacturer and not by the supplier manufacturer, therefore taking into consideration the provisions of Rule 6 and the obligation of the buyer for execution of the bond, we are of the clear view that if at all exemption is not available duty can be recovered from buyer and not from the supplier - appeal allowed - decided in favor of appellant.

Summary

Issues:
Interpretation of exemption notification for Insulated Wires and Cables under Central Excise Tariff Act, 1985.

Analysis:
The appellant, engaged in manufacturing Insulated Wires and Cables, cleared goods at NIL rate of duty to a buyer under exemption notification No. 6/2002-CE. The department objected, claiming wires and cables were not covered by the exemption entry. The demand was upheld by the Commissioner(Appeals), leading to the appeal.

The appellant argued that even if goods were not eligible for exemption, they supplied based on the buyer's annexure under Central Excise Rules. They contended that any duty liability should be on the buyer, not the supplier, citing relevant judgments supporting this position.

The Revenue reiterated that wires and cables did not qualify for the exemption due to not being energy devices/systems, hence the duty liability rested with the appellant as the manufacturer.

The Tribunal noted that the goods were cleared at NIL duty based on the buyer's annexure, confirming the goods were for non-conventional energy use, shifting end-use responsibility to the buyer. Referring to the Concessional Duty Rules, the Tribunal emphasized recovery of duty should be from the user manufacturer, not the supplier, as per Rule 6.

Examining Rule 6, the Tribunal clarified that duty recovery should be from the buyer if goods were not used for the intended purpose, aligning with the judgments cited by the appellant. Consequently, the Tribunal set aside the impugned order, allowing the appeal.

In conclusion, the Tribunal ruled that duty recovery, if exemption was not applicable, should be from the buyer as per the Concessional Duty Rules, not the supplier. The judgments cited supported this view, leading to the appeal's success.