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TMI Blog2023 (12) TMI 844X X X X Extracts X X X X X X X X Extracts X X X X ..... NVAT Credit availed input, and these jig rods / jig wires were captively consumed without payment of duty availing the exemption of Notification No. 67/95 dated 16.03.1995 by classifying the jig rods and jig wires under Chapter Heading 76169990. 2.2 It appeared to the Department that the appellant is not eligible for the benefit of exemption of Notification No. 67/95 dated 16.03.1995 read with CENVAT Credit Rules, 2004, as the definition of capital goods as per CENVAT Credit Rules, 2004 does not cover goods falling under Chapter Heading 76. Although, the jig rods and jig wires are ultimately used in manufacture of finished products, they are to be considered not as capital goods and therefore appellant is not eligible for exemption of duty. Show Cause Notices for different periods were issued proposing to demand the Excise Duty payable on jig rods and jig wires along with interest and for imposing penalties. After due process of law, the original authority confirmed the duty along with interest and imposed penalties. On appeal, Commissioner (Appeals) upheld the same. Hence, these appeals. 3.1 The ld. Consultant Shri R. Janardhanan Pillai appeared and argued for the appellant. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers passed by Commissioner (Appeals). The Ld. counsel prayed that the appeals may be allowed. 4. The Ld. Authorised Representative Shri Rudra Pratap Singh appeared and argued for the Department. The meaning of 'jig' was explained by adverting to various definitions. Jigs are used by the appellant for positioning and holding during the goods in process of manufacture of needles. The final product cannot be manufactured without these jigs and moulds. It is submitted that as the appellant has classified them under Chapter 76, they do not fit into the definition of capital goods under CENVAT Credit Rules, 2004. The authorities have therefore rightly denied the exemption under Notification No. 67/95 dated 16.03.1995. It is prayed that the appeal may be dismissed. 5. Heard both sides. 6.1 The issue for analysis is whether the jig wires and jig rods are eligible for exemption under Notification No. 67/95 dated 16.03.1995 as an intermediate product manufactured by appellant and captively used in the manufacture of finished products. 6.2 The issue stands decided in the appellant's own case for earlier as well as subsequent periods. The Tribunal vide F.O.No. 40690-40694/2014 dated 11.08. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Appeals) that the resins are intermediate products in the manufacture of paints was rejected by that authority on the ground that they were fully manufactured products attracting classification under sub-heading 3907.50. The fact that alkyd maleic resins are classifiable under the Excise Tariff does not rule out their status or identity as intermediate products in relation to the manufacture of the final products, paints. The term "intermediate product is a relative concept and is to be understood in the context of the use of such products in the manufacture of the final product. If the alkyd resins etc. are cleared from the factory where they are produced, they are final products and the Tariff classification and Tariff becomes relevant for its assessment and clearance. But where such goods are not cleared outside but are captively consumed in the manufacture of the final products, they are intermediate products. Because they are classifiable under a Tariff Heading and are otherwise final products themselves is not inconsistent with their identity as intermediate products vis-a-vis the final product, paints. Rule 57D(2) specifically provides that credit shall not be denied on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... final product. 5. In view of the above discussion, we consider that these Items are Intermediate products captively used in the manufacture of dutiable final product and therefore cenvat credit cannot be denled. Accordingly, we set aside the Impugned orders in respect of all the appeals except Appeal E/837/2006 and allow the appeals with consequential relief. In Appeal E/837/2006, we set aside the order of the Commissioner (Appeals) and restore the order of the adjudicating authority." 6.3 The Commissioner (Appeals) for the subsequent period has followed the decision of the Tribunal to set aside the demand. The relevant para of Order-in-Appeal No. 248/2016 dated 09.11.2016 reads as under : - 09. The demand of duty on jigs and wires has been confirmed on the ground that these goods viz jig rods and jig wires falling under Chapter Heading 76169990 are not exempted from payment of duty by Notification 67/95 dated 16.3.95 as inputs as these are not essential items or materials required for production and whose presence/properties may be identified in the final products. 10. However on perusal of Notification 67/95 dated 16.3.95 it is seen that it exempts (a) Capital goods as def ..... X X X X Extracts X X X X X X X X Extracts X X X X
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