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TMI Blog2008 (10) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... products, they procured/received parts/components; they took credit of the duty paid on such inputs. (b) The appellants supplied their final products (knitting machines) to100% Export-Oriented Units (EOUs) without payment of duty against CT-3 certificates in terms of Notification No.1 /95-C.E., dated 4-1-1995. In addition to supplying the final products (knitting machines) manufactured by them, they also cleared some inputs (on which cenvat credit has been taken by them) to the 100% EOUs. They have neither paid the excise duty nor reversed the cenvat credit attributable to such inputs cleared. (c) The department held that the 100% EOUs were entitled to receive the duty free inputs only directly from the factory of manufacture; that the inputs should have been cleared by the appellant only after reversal of the Cenvat credit or on payment of appropriate duty as stipulated under Rule 57F(3). (d) On the above grounds, in two of the cases demands were confirmed by the original authority and the said orders stand upheld by the Commissioner (Appeals). In the other two cases, the appellants cleared the inputs after paying the duty/reversing the credit and claimed refunds which were rej ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [2002] (148) E.L.T. 796 (Tri.-Del.)]. (v) Commissioner of Central Excise, Pune-II v. Finolex Industries Ltd. [2008] (85) RLT 395 (CESTAT-Mum.)]. (vi) Manaksia Ltd. v. Commissioner of Central Excise, Kolkata-IV [2007] (216) E.L.T. 231 (T) = 2007 (81) RLT 620 (CESTAT-Kol.)] 5. The learned SDR submitted the following :- (a) The appellants are permitted clearance of only their "final products" namely, the knitting machines to 100% EOUs under Notification No. 1/95. However, the inputs manufactured by third parties and on which they have taken credit cannot be deemed to be manufactured by the appellant especially after the amendment dated 29-6-1995 and allowed clearance to 100% EOU under Notification No.1/95 making one of the important conditions of the said Notification as redundant. (b) The appellant is required to utilise the input procured only for the intended purpose i.e., for use in the manufacture of their final products. In exceptional circumstances they are permitted to clear the inputs as provided in Rule 57F(1). They can, after intimating the Assistant Commissioner, remove the inputs for export under bond, or remove for home consumption. Such removal shall be on payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 100% EOUs under Notification No. 1/95 as the said inputs are neither manufactured nor can be "deemed" to have been manufactured by the appellant. The inputs could be imported as well and the question of extending the benefit of the said notification does not arise. Extending the benefit of the Notification to such clearances of inputs procured from domestic source would render one of the conditions of the said Notification, which relate to procurement directly from the factory of manufacture, as redundant. There is no justification to treat this condition as a procedural one, as claimed by the appellant. A submission has been that the supplies have been made by the appellant on the basis of CT-3 certificates issued by jurisdictional Central Excise authorities in-charge of 100% EOUs. We hold that the certificates are valid only for procurement of goods manufactured by the supplying units and not the inputs procured by them from third parties or imported inputs. 6.2 Extending the benefit of the Notification 1/95 to the clearance from the premises of a person other the manufacturer, as in the present case, would be against the general ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplied to projects funded by the, on which exemption of duty is available under notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 108/95-Central Excise, dated the 28th August, 1995 under bond shall be allowed to be utilised towards payment of duty of excise on similar final products cleared for home consumption on payment of duty." 6.4 It can be seen that Rule 57F contains provisions relating to utilisation of the inputs and utilisation of credit taken. As far as the inputs are concerned, the general rule is that they should be utilised for the manufacture of final products. However, it contains certain exceptions. The inputs can be both imported as well as locally procured. The inputs can, after intimating the jurisdictional excise authorities, be exported under bond; it can also be cleared for home consumption but only on payment of duty or on reversal of credit. There is no provision for supply of such inputs to 100% EOUs on deemed export basis. Thus, the Rule 57F(1) permits clearance for home consumption only on payment of duty and only for export, clearance can be effected on bond. 6.5 The provisos to Rule 57F(4) relied upon by th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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