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2017 (5) TMI 511 - AT - Central ExciseBenefit of N/N. 6/2002-CE dated 1.3.2002 - manufacture of conveyor belt systems - The appellant has supplied conveyor belt systems to their customers, M/s. Kalpa-taru Power Transmission Limited, which has been granted license from Rajastan Renewable Energy Corporation to set up biomass based power project - impugned item can be considered as parts of waste convention devices producing energy so original authority denied the exemption - Held that - similar issue decided in the case of GERB Vibration Control Systems (P) Ltd. vs. CCE, Bangalore 2007 (10) TMI 180 - CESTAT, BANGALORE , where it was held that item 21 of list 9 of N/N. 6/02 indicates that the exemption is available only for captive consumption, Tribunal cannot ignore such condition stipulated in notification so exemption not available - exemption rightly denied - appeal dismissed - decided against appellant.
Issues:
1. Benefit of Notification No.6/2002-CE dated 1.3.2002 availed by the appellant. 2. Central excise duty payable on conveyor belt systems cleared without duty payment. 3. Interpretation of the condition of notification regarding consumption within the factory of production. 4. Exemption under item 21 of list 9 of the notification for parts consumed within the factory of production. 5. Availability of exemption only for captive consumption. Analysis: 1. The appellant, engaged in manufacturing goods falling under Chapter 84 of the Central Excise Tariff Act, availed the benefit of Notification No.6/2002-CE dated 1.3.2002 and cleared conveyor belt systems without paying duty amounting to ?18,40,000. The Revenue sought to disallow this benefit, leading to a demand confirmed in the Order-in-Original along with a penalty. 2. The Commissioner (A) upheld the central excise duty payable on the goods but set aside the penalty. The appellant supplied conveyor belt systems to customers involved in setting up biomass-based power projects. The issue of consumption within the factory of production arose, leading to the present appeal against the impugned order. 3. The Tribunal referred to a similar case involving GERB Vibration Control Systems (P) Ltd. vs. CCE, Bangalore, where the Tribunal held that the benefit of the notification cannot be denied based on the ground that certain parts were not consumed within the factory of production. The Tribunal emphasized that the concept of consumption at the site where the final structure is assembled should also be considered. 4. The appellant claimed exemption under item 21 of list 9 of the notification for parts consumed within the factory of production. However, the Tribunal noted that the parts in question were supplied to other units and not consumed within the factory of production. The Tribunal highlighted the strict interpretation of the notification's conditions and the limitation of exemption to captive consumption, ultimately upholding the impugned order and dismissing the appeal. 5. The Tribunal emphasized that the condition stipulated in the notification, requiring consumption within the factory of production for availing exemption, made it impossible for manufacturers supplying goods to other units to benefit from the exemption. The decision cited by the appellant lacked reasoning to support the denial of exemption based on non-consumption within the factory of production. Consequently, the Tribunal upheld the impugned order based on the strict interpretation of the exemption condition, leading to the dismissal of the appeal.
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