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2023 (7) TMI 660 - AT - Central ExciseClearances made to Mega Power Projects under International Competitive Bidding - Final product supplied against the international competitive bidding - intermediate goods - Denial of benefit of N/N. 67/95-CE dt. 16.03.1995 as the final products are exempted from the whole of duty of excise - whether the appellant is liable to pay duty on intermediate goods? HELD THAT - The Tribunal after following the decision in the BHARAT ALUMINIUM CO. LTD. VERSUS COMMISSIONER OF C. EX., RAIPUR 2017 (4) TMI 276 - CESTAT NEW DELHI , the decision in M/S. KEI INDUSTRIES LTD., N HASHMI VERSUS COMMISSIONER OF CENTRAL EXCISE 2016 (12) TMI 532 - CESTAT NEW DELHI held that duty demanded on intermediate products cannot sustain. It is not in dispute that the clearances were made to Mega Power Projects under International Competitive Bidding. Following the decision, it is held that the demand confirmed by impugned orders in Appeal Nos.E/40280-40282/2016 cannot sustain and requires to be set aside. Appeal allowed.
Issues Involved:
1. Liability to pay duty on intermediate goods. 2. Denial of cenvat credit for the period July 2015. For the first issue of liability to pay duty on intermediate goods, the appellant, engaged in manufacturing industrial valves and gaskets, availed cenvat credit on inputs, capital goods, and input services. The department alleged that the appellant supplied control valves to Mega Power Projects without paying excise duty, and some sub-assemblies were cleared without duty payment. The department argued that the benefit of certain notifications was not available to the appellant. Show cause notices were issued, and after due process, duty, interest, and penalties were confirmed by the original authority and upheld by the Commissioner. The appellant contended that they were not liable to pay duty on intermediate goods as per relevant notifications and rules. The Tribunal, following precedent cases, held that duty demanded on intermediate products cannot be sustained, as the clearances were made under International Competitive Bidding. Regarding the second issue of denial of cenvat credit for the period July 2015, the appellant had availed credit based on supplementary invoices issued when duty was paid due to a demand invoking the extended period. The adjudicating authority confirmed the demand, and the appellant paid the amount and availed credit. The department proposed to deny credit under Rule 9 (1) (b) of CCR 2004. However, since the duty demand on intermediate products was set aside, the duty paid would be eligible for credit, and the bar under Rule 9 (1) (b) of CCR 2004 would not be applicable. The Tribunal set aside the impugned order denying cenvat credit for the period July 2015. In conclusion, the appeals were allowed with consequential relief, if any, on the basis that the duty demand on intermediate products could not be sustained, and the denial of cenvat credit for the period July 2015 was set aside.
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