2017 (9) TMI 267 - AT - Central Excise

Captive consumption - benefit of N/N. 67/95CE - case of Revenue is that during the process of manufacturing of the finished goods, armoured cable or cable at armoured stage and sheathed wire were arising which are chargeable to duty and the benefit of captive consumption N/N. 67/95CE is not available as the finished goods were cleared without payment of duty - Held that - identical issue has come up before the Tribunal in the case of KEI Industries Ltd. and others Vs. CCE, Alwar 2016 (12) TMI 532 - CESTAT NEW DELHI , where it was held that assessee was not liable to pay CE duty on copper wire manufactured and captively used in the manufacture of insulated (power) cables in the factory during the material period - the appellant is entitled for benefit of N/N. 67/1995 ibid for intermediate product emerging during the course of manufacture of final product - appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeals against Order-in-Originals for duty on intermediate products used in manufacturing power cables.

Analysis:
The appeals were filed against Order-in-Originals dated 31.08.2015, 30.11.2015, and 30.09.2016, concerning the duty on intermediate products used in the manufacture of power cables. The issue in all appeals was identical, so they were disposed of collectively for convenience, covering the period from February 2012 to February 2015. During this period, the appellants manufactured power cables and cleared them for Mega Power Projects under full exemption. The dispute arose when officers alleged duty liability on armoured cables and sheathed wire arising during manufacturing, as the finished goods were cleared without duty payment, invoking clandestine removal charges.

Upon hearing both parties and examining the case records, the Tribunal referred to a similar case involving KEI Industries Ltd. and others, where it was established that duty liability on intermediate products used in manufacturing final goods cleared with duty payment did not apply. Citing the provisions of Rule 6(6)(vii) of the CENVAT Credit Rules, 2004, and Notification No.67/95CE, the Tribunal concluded that the appellants, who cleared final products with duty payment, were entitled to the benefit of the notification for intermediate products used in manufacturing. Consequently, the impugned orders were set aside, and the appeals were allowed with consequential relief.

In light of the Tribunal's decision on similar facts, it was held that the appellants were entitled to the benefit of Notification No.67/1995 for intermediate products used in manufacturing final goods. Therefore, the impugned order was found to lack merit, leading to its setting aside and the allowance of the appeals filed by the appellants.