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TMI Blog2025 (1) TMI 1148X X X X Extracts X X X X X X X X Extracts X X X X ..... lumn (1) of the Table and is used in or in relation to the manufacture of both types of final products covered under Column (2) of the Table of the notification. It is also an undisputed position that the appellant had not availed the Cenvat Credit of duty or tax paid on any inputs or input services or capital goods which were used in the manufacture of both exempted and dutiable goods. The fact that the appellant has not availed the Cenvat Credit shows that they had discharged the obligation as prescribed under Rule 6 of the Rules. In arriving at the conclusion, that the appellant had discharged the obligation in terms of Rule 6 as no Cenvat Credit was availed, we are supported by the decisions as referred to by the learned Counsel for the appellant. In the case of AMBUJA CEMENT LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH [2015 (11) TMI 1413 - SUPREME COURT], the Apex Court considered the issue relating to the interpretation of the exemption notification no. 67/1995 with reference to the dutiability of the intermediary product 'clinker' obtained at the intermediary stage in the production of 'cement', which is exempted from the excise duty under the exemption notifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Advocates for the Appellant Shri V.K. Jain, Authorised Representative of the Respondent ORDER The appellant has challenged the order in original no. 04-07/COMMR/CEX/GWL/2016 dated 13.05.2016 and Order-in-Appeal No. IND-EXCUS-000-APP-097-2020-21 dated 30.12.2020 confirming the entire demand of Central Excise Duty along with interest and further penalty equal to the demand of duty confirmed. 2. The facts of the case are that the appellant is engaged in the manufacture of finished leather falling under Chapter 41 of the First Schedule to Central Excise Tariff Act, 1985 ("CETA") having 'NIL' rate of Central Excise duty, and were, therefore cleared without payment of Central Excise duty. The appellant is also engaged in the manufacture of leather articles such as footwear, clothes, etc., falling under Chapter 42 of the CETA, which were cleared upon payment of Central Excise duty. 3. The appellant had cleared 70% of the exempted final product, i.e. finished leather, without payment of duty, while the remaining 30% finished leather was captively consumed by appellant in the manufacture of dutiable final product, i.e. leather articles, cleared upon payment of duty. 4. The appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intermediary product 'season' manufactured and captively used by the appellant is eligible for the benefit of exemption under Notification No. 67/1995. In order to appreciate the issue it is necessary to examine the contents of the said notification which is reproduced below: "Notification 67/1995-CE: In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), read with sub-section (3) of section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957), (hereinafter referred to as the said Special Importance Act), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts- (i) Capital goods as defined in the Cenvat Credit Rules, 2002 manufactured in the factory and used within the factory of production; (ii) Goods specific in column (1) of the Table hereto annexed (hereinafter referred to as 'inputs') manufactured in a factory and used within the factory of production in or in relation to the manufacture of final products specified in column (2) of the said Table; From the whole of the duty o excise leviable thereon which is specified i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... * Spray King Agro Equipment Pvt. Ltd. and Hitesh P Dudhagra vs. CCE & ST Rajkot, Final order no. A/10415-10416/2022 dated 05.05.2022-CESTAT Ahmedabad. * Shree Extrusion Ltd. vs. Commissioner of Central Excise & ST, Rajkot, Final order no. A/12601/2018 dated 15.11.2018 - CESTAT Ahmedabad 10. With regard to the eligibility of the exemption notification, as claimed by the learned counsel for the appellant, it is necessary to appreciate as to whether the appellant has discharged the obligation in terms of Rule 6 of the CCR, 2001. We find that the appellant is engaged in the manufacture and clearance of the goods both dutiable and exempted. From the contents of the notification we also find that the intermediary product 'season' prepared in the factory of the appellant is covered under Column (1) of the Table and is used in or in relation to the manufacture of both types of final products covered under Column (2) of the Table of the notification. It is also an undisputed position that the appellant had not availed the Cenvat Credit of duty or tax paid on any inputs or input services or capital goods which were used in the manufacture of both exempted and dutiable goods. The fact th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xempted services shall pay the whole amount of credit of input and input services and shall, in effect, not be eligible for credit of any inputs and input services.] 11. In arriving at the conclusion, that the appellant had discharged the obligation in terms of Rule 6 as no Cenvat Credit was availed, we are supported by the decisions as referred to by the learned Counsel for the appellant. In the case of Ambuja Cement (Supra), the Apex Court considered the issue relating to the interpretation of the exemption notification no. 67/1995 with reference to the dutiability of the intermediary product 'clinker' obtained at the intermediary stage in the production of 'cement', which is exempted from the excise duty under the exemption notification no. 50/2003 dated 10.06.2003. The Apex Court, inter-alia observed as under: "16. This Rule is not applicable as such in its totality since taking of Cenvat Credit is not in issue in these cases. On the other hand, relevance of this Rule is only to the extent of 'obligation' contained in the said Rule which is to be discharged. A plain reading of clause (vi) of the notification would show that it only contemplates a situation where 'a manufactu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee avails the Cenvat credit and follows the condition of Rule 6(2) such as payment of 8% of the value of the goods or maintaining separate account in respect of dutiable and final product and reversal of proportionate credit etc. which is not applicable in the present case as the appellant have not availed the Cenvat credit at all in respect of any of the inputs, therefore they have discharged the obligation as required under Rule 6(1). We are therefore of the considered view that the appellant have discharged the obligation under Rule 6(1) accordingly they are legally entitled for the exemption Notification No. 67/95-C.E., dated 16-3-1995 in respect of their intermediate product i.e. packing boxes. The impugned order is set aside. The appeals are allowed." 13. Similar observations have been made in Spray King Agro (Supra) that exemption under notification is available to the intermediary goods even if the final product is exempted, provided the assessee discharges the obligation prescribed under Rule 6 of the CCR, 2001. In the context, it was observed that the appellant during the impugned period was not registered with the Central Excise Department, hence, has not availed th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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