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TMI Blog2018 (11) TMI 300X X X X Extracts X X X X X X X X Extracts X X X X ..... J. C. Patel Ld. Counsel appearing on behalf of the appellant submits that in the Exemption Notification No 67/95-CE in respect of exempted goods certain exception were provided in the Proviso to Notification whereby as per Clause (I to VI) even though the final goods is exempted, Notification No. 67/95-CE is available in respect of intermediate goods i.e. Clinker in the present case. He submits that in this case Clause VI is applicable as the appellant have complied with the obligation under Rule VI of Cenvat Credit Rules, 2004 in terms of Rule 6(6)(vii) of Cenvat Credit Rules, 2004. As the appellant was entitled for Cenvat Credit on the inputs and covered under the Rule 6(6)(vii) of Cenvat Credit Rules, 2004, thus the obligation under Clause (VI) was fulfilled. Therefore, Exemption Notification No. 67/95-CE is available on the intermediate goods i.e. Clinker for manufacture of Cement which was cleared under Exemption Notification No. 6/2006-CE. He placed reliance on the following judgments: * Thermo Cables Ltd Vs. CCE 2013 (292) ELT 412 * Kei Industries Ltd Vs. CCE 2017 (357) ELT 1230 * Bharat Aluminium Co. Ltd Vs. CCE 2017 (345) ELT 685 * Ultratech Cements Ltd Vs. CCE 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 108/95-CE, dated the 28th August, 1995, or vi. by a manufacturer of dutiable and exempted final products, after discharging the obligation prescribed in rule 6 of the CENVAT Credit Rules, 2001. Table Description of inputs Description of final products (1) (2) All goods falling under the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), other than light diesel oil, high speed diesel oil and motor spirit, commonly known as petrol All goods falling under the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), 5. From the plain reading of the above notification, it is observed that as per the above Notification, exemption is available in respect of goods used captively in the factory, within the factory of production in relation to manufacturing of final product. The Proviso to above notification provides that nothing contain in this Notification shall apply to inputs used in or relation to the manufacture of final product which are exempted from the whole duty of excise or chargeable to nil rate of duty, however the exception to this Proviso is provided in respect of supplies meant as mentioned in Clause I to V and also under Clause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tral Excise dated the 1st March, 2002 or Notification No.6/2006-Central Excise dated the 1st March, 2006, as the case may be. From the above provision, it is clear that the appellant did not have any liability under sub-rule (2) to maintain separate accounts for receipt, consumption and inventory of inputs meant for use in the manufacture of dutiable final products and inputs meant for use in the manufacture of exempted goods, nor did the assessee have alternative liability under sub-rule (3) to pay an amount equal to 10% of the value of the exempted goods. This is because their final products were cleared against international competitive bidding in terms of Notification No.6/2006 CE ibid. 5. Against the above backdrop, one has to examine the scope of Notification No.67/95 CE dt. 16/03/1995 (as amended) in so far as the present case is concerned. The opening paragraph of this Notification exempts from payment of CE duty any inputs manufactured in a factory and used within the same factory in or in relation to the manufacture of final products. Input must be one of those specified in the first column and the final product must be one of those specified in the second column of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (4) of Rule 6 inasmuch as these sub-rules were not applicable, by virtue of sub-rule (6), to the assessee who were clearing their exempted final products against international competitive bidding in terms of Notification No.6/2006-CE ibid. In other words, a conjoint reading of sub-rule (6) of Rule 6 of the CENVAT Credit Rules 2004 and clause (vi) under the proviso to Notification No.67/95-CE ibid would show that the assessees claim for exemption from payment of duty on copper wire under the Notification was not hit by the opening portion of the proviso to the Notification. 7. In the result, the 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 impugned demands and the connected penalties are, therefore, liable to be set aside. It is ordered accordingly. 8. Both the appeals are allowed." The same issue has also been considered by Tribunal in the case of Kei Industries Ltd (Supra) wherein the Coordinate Bench of this Tribunal following the Thermo Cables Ltd judgment passed following order: "7. On careful consideration of submissions of both the side ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee have alternative liability under sub-rule (3) to pay an amount equal to 10% of the value of the exempted goods. This is because their final products were cleared against international competitive bidding in terms of Notification No. 6/2006-C.E. ibid. 5. Against the above backdrop, one has to examine the scope of Notification No. 67/95-C.E., dated 16-3-1995 (as amended) in so far as the present case is concerned. The opening paragraph of this Notification exempts from payment of CE duty any inputs manufactured in a factory and used within the same factory in or in relation to the manufacture of final products. Input must be one of those specified in the first column and the final product must be one of those specified in the second column of the table annexed to the Notification. Admittedly, copper wire is one of the inputs and the power cables manufactured and cleared by the assessee are final products covered by the Notification. However, the Department would like to deny the benefit of this Notification to copper wire manufactured by the assessee and captively consumed in their factory for the manufacture of insulated (power) cables. According to the Revenue, the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s claim for exemption from payment of duty on copper wire under the Notification was not hit by the opening portion of the proviso to the Notification. 7. In the result, the 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 impugned demands and the connected penalties are, therefore, liable to be set aside. It is ordered accordingly". 9. As facts of the case are not disputed that the appellant is manufacturing final products and clearing the same on payment of duty in the open market and to Mega Power Projects without payment of duty. In that circumstances, the appellant is entitled for benefit of notification No. 67/1995 ibid for intermediate product emerging during the course of manufacture of final product. Therefore, the impugned orders deserves no merits. Hence, the same are set aside. 10.Consequentially, the appeals are allowed with consequential relief, if any." 6. In view of the above discussion and following the ratio of above judgments, the issue is no longer res-integra, therefore, the impugned orders are not sustainable, hence the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X
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