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TMI Blog2023 (12) TMI 1206X X X X Extracts X X X X X X X X Extracts X X X X ..... tification 65/95. However, it is observed that they are eligible for the exemption under the notification 67/95, since the said railway track, rail wagons, and locomotives are integral to the manufacture of the goods - The inability to transport the inputs and intermediate products in the absence of rail traffic will cause stoppage of production and can also result in damage of the plant and machinery. The said railway track, rail wagons, and locomotives are integral to the manufacture of the goods of the Appellant and are therefore they can be considered as machineries installed in the factory for the manufacture of the goods. It is observed that Notification 67/95 exempts from payment of duty all goods specified therein manufactured in a factory and used within the factory of production in or in relation to manufacture of final products. The scope of this notification is wide enough to cover the acetylene gas manufactured by the Appellant and used in the traffic department for repair and maintenance of railway track, wagons etc., and the acetylene gas used in 26 shops/departments for repair and maintenance of machineries. The issue of whether railway tracks used in the pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 65/95-CE provides for exemption to goods manufactured in a factory workshop and used for the maintenance of machinery installed in the factory. Whereas Notification no. 67/95-CE provides exemption for capital goods and inputs captively consumed within the factory of production. In respect of the aforementioned clearance of the acetylene gas availing the benefit of the above said exemption notifications, the Appellant was issued various SCNs seeking to deny benefit of the notifications on the following grounds: As regards Notification No. 67/95-CE dated 16.03.1995 since it is not directly used in the manufacture of dutiable goods. The Appellant used the gas to manufacture another exempt intermediate product which was further used in manufacture of dutiable product. As regards Notification No. 65/95-CE dated 16.03.1995- Use of acetylene gas for cutting and welding purposes in the repair and maintenance works through intermediate products and not directly. 4. On the basis of these allegations, an amount of Rs. 1,41,58,924/- was demanded on the acetylene gas consumed captively in the factory during the underlying period. The Commissioner of Central Excise, Ranchi pass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Appellant under Notification No. 65/95-CE. Therefore, the impugned Order is liable to be set aside on this ground alone. In this regard, the Appellant placed their reliance on the decision of the Hon ble Apex Court in the case of Commissioner of Central Excise, Nagpur v. Ballarpur Industries Ltd., 2007 (215) E.L.T. 489 (S.C.) 6. The Ld. Commissioner has denied the benefit of exemption under Notification No. 65/95-CE dated 16.03.1995 for the acetylene gas used in the traffic department for repair and maintenance of rail tracks, railway wagon and loco on the ground that benefit of exemption notification no. 65/95-CE dated 16.03.1995 is not eligible as the use of acetylene gas for such activity cannot be said to be used for repair and maintenance of machinery installed in the factory. It has been held that the railway track, railway wagon, loco, and vehicles of operation garage are not machineries installed in the factory. Further, it has been held that the expression machinery installed in the factory implies that the machinery should be used for manufacture of goods. In this regard, the Appellant submits that in order to cater to the requirements of production, inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing aside the demand and allowing their appeal. 7. The Ld. D.R. reiterated the findings of the adjudicating authority in the impugned order. 8. Heard both sides and perused the appeal documents, 9. We observe that the issue to be decided in the present appeal is whether exemption under Notification No. 65/95-CE or 67/95-CE is applicable to Acetylene Gas captively consumed within the factory for repair and maintenance of railway track, railway wagon, loco and in certain shops and departments for repair and maintenance of machineries We find that in the impugned order the adjudicating authority has denied the benefit of Notification no. 65/95-CE on the following two grounds: The acetylene gas has not been manufactured in the workshop; and The benefit of notification is only available for the machineries that are installed in the factory and the expression machinery installed in the factory conveys the meaning that the machinery should be used for the manufacture of final goods. Since the acetylene gas has been used for repair and maintenance of machineries that are not used for the manufacture of final goods, the exemption will not be applicable. 10. We obser ..... 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