2000 (12) TMI 325 - AT - Central Excise

Summary

Issues:
- Denial of benefit of Notification No. 67/95-C.E. dated 16-3-1995
- Clearances of final product to M/s. Samtel India Ltd. against CT-2 certificate
- Interpretation of proviso appended to Notification No. 67/95-C.E.
- Applicability of Rule 13 of the Central Excise Rules
- Legal sustainability of duty demand and penalty imposition

Analysis:

The appeal was filed against the order confirming a duty demand and imposing a penalty on the appellants for clearing TV glass shells to M/s. Samtel India Ltd. against CT-2 certificates at nil rate of duty, thereby denying them the benefit of Notification No. 67/95-C.E. dated 16-3-1995. The dispute revolved around whether the clearances of the final product exempt from duty or chargeable at nil rate under Notification No. 47/94-C.E. (NT) could affect the benefit under Notification No. 67/95-C.E. The appellants argued that clearances under CT-2 certificates did not qualify as exempt from duty or nil rate under the law.

The Tribunal analyzed the provisions of Notification No. 67/95-C.E. and the proviso attached to it, which excluded inputs used in the manufacture of final products exempt from duty or chargeable at nil rate from its purview. The Revenue contended that since no duty was paid on the final product clearances, the denial of Notification No. 67/95 benefit was justified. However, the Tribunal noted that the final TV glass shells were not exempt from excise duty during the relevant period but were cleared to the exporter under CT-2 certificates issued under Notification No. 47/94-C.E.

The Tribunal referred to relevant case laws, including CCE, Vadodara v. Steelco Gujarat Ltd., to support the appellants' argument. It emphasized that Rule 13 of the Central Excise Rules allowed duty-free export of goods specified under Notification No. 47/94-C.E. The Tribunal concluded that the appellants were entitled to the benefit of Notification No. 67/95-C.E. as their final product was not exempt from duty or chargeable at nil rate, considering the clearances made to the exporter under CT-2 certificates.

Ultimately, the Tribunal set aside the Commissioner's order, ruling in favor of the appellants. It held that the denial of the Notification No. 67/95 benefit and the duty demand and penalty imposition were not legally sustainable. The appellants' appeal was allowed, and they were granted consequential relief as permissible under the law.