2002 (9) TMI 140 - AT - Central Excise

Summary

Issues involved: Interpretation of Notification No. 67/95-C.E. regarding exemption for capital goods used within the factory of production.

In this case, the Appellate Tribunal CEGAT, Court No. II, New Delhi, considered an appeal filed by M/s. Elcon Clipsal India Ltd. regarding the availability of exemption under Notification No. 67/95-C.E. for moulds, dies, and press tools used within their factory for manufacturing electrical goods. The Assistant Commissioner had disallowed the exemption, stating that the goods cannot be treated for captive consumption. The Commissioner (Appeals) upheld this decision, emphasizing the need to follow Rule 173H of the Central Excise Rules for retaining goods in the factory for others. The Appellants argued that the ownership of the goods is irrelevant for availing the exemption and cited the case of BPL Electronics Ltd. v. C.C.E., Bangalore, 1994 (71) E.L.T. 801 (T) in support.

The Tribunal examined the submissions and found that Notification No. 67/95-C.E. exempts capital goods manufactured in a factory and used within the factory of production. It was acknowledged that the impugned goods were indeed used within the factory of production. The Tribunal agreed with the Appellants that the exemption is based on the place of use, not ownership, and that the goods being sold does not disqualify them from the exemption. Referring to the case of BPL Electronics Ltd., the Tribunal emphasized that as long as the goods are manufactured in a factory and intended for use in that factory, the exemption applies, regardless of any sale transactions.

Therefore, the Tribunal concluded that the Appellants are eligible for the benefit of exemption under Notification No. 67/95-C.E. and allowed the appeal.