Case Law Details
Jindal Saw Ltd Vs C.C. E. & S.T.- Rajkot (CESTAT Ahmedabad)
The appellants are engaged in manufacture of iron and steel products. During the process of manufacture, scrap is generated and the same is either used within the factory of production for manufacture of goods or cleared on payment of duty. In so far as the goods are used captively for manufacture of other goods, benefit of Notification 67/1995-CE dated 16.03.1995 has been claimed.
CESTAT find that Notification 67/1995-CE dated 16.03.1995 prescribes exemption for goods captively consumed subject to the condition that the finished goods produced out of the same are cleared on payment of duty. Notification 67/1995-CE dated 16.03.1995 also prescribes that in case the obligation under Rule 6(3) of the Cenvat Credit Rules is fulfilled in respect of the goods cleared under full exemption then the benefit of Notification 67/1995-CE dated 16.03.1995 cannot be denied.
A perusal of proviso of clause – vi indicates that in case the obligation under Rule 6 of the Cenvat Credit Rules is fulfilled than the exemption to Notification 67/1995-CE dated 16.03.1995 cannot be denied. In the instant case a categoric claim has been made before the lower authorities that the appellant have fulfilled their obligation under Rule 6 of the CCR. In view of these facts, benefit of Notification 67/1995-CE dated 16.03.1995 cannot be denied to the appellant.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
This appeal has been filed by Jindal Saw Limited against demand of Central Excise duty on scrap produced and consumed by the appellant captively.
1.1 The appellants are engaged in manufacture of iron and steel products. During the process of manufacture, scrap is generated and the same is either used within the factory of production for manufacture of goods or cleared on payment of duty. In so far as the goods are used captively for manufacture of other goods, benefit of Notification 67/1995-CE dated 16.03.1995 has been claimed.
2. Learned counsel pointed out that the benefit of Notification 67/1995-CE dated 16.03.1995 has been denied as the appellant is clearing some of the products without payment of duty under exemption Notification No. 06/2006-CE dated 01.03.2006 and 03/2004-CE dated 08.04.2004. Learned counsel pointed out that in respect of such clearance they are complying with the provision of rule 6(3) of the Cenvat Credit Rules. He pointed out that if the appellant is fulfilling the requirement of Rule 6 of the Cenvat Credit Rules, then the benefit of Notification 67/1995-CE dated 16.03.1995 cannot be denied in terms of clause-vi of the Proviso to the Notification 67/1995-CE dated 16.03.1995. He pointed out that this claim was specifically made by the appellant before the lower authorities but the same has been ignored by the lower authorities.
3. Learned Authorized Representative relied on the impugned order.
4. We have considered rival submissions. We find that Notification 67/1995-CE dated 16.03.1995 prescribes exemption for goods captively consumed subject to the condition that the finished goods produced out of the same are cleared on payment of duty. Notification 67/1995-CE dated 16.03.1995 also prescribes that in case the obligation under Rule 6(3) of the Cenvat Credit Rules is fulfilled in respect of the goods cleared under full exemption then the benefit of Notification 67/1995-CE dated 16.03.1995 cannot be denied. Proviso of Notification 67/1995-CE dated 16.03.1995 reads as under:
“Provided that nothing contained in this notification shall apply to inputs used in or in relation to the manufacture of final products which are exempt from the whole of the duty of excise or additional duty of excise leviable thereon or are chargeable to nil rate of duty, other than those goods which are cleared :-
i. to a unit in a [ Special Economic Zone ], or
ii. to a hundred per cent Export Oriented Undertaking or
iii, to a unit in an Electronic Hardware Technology Park, or
iv. to a unit in a Software Technology Park, or
v. under notification No. 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.”
A perusal of proviso of clause – vi indicates that in case the obligation under Rule 6 of the Cenvat Credit Rules is fulfilled than the exemption to Notification 67/1995-CE dated 16.03.1995 cannot be denied. In the instant case a categoric claim has been made before the lower authorities that the appellant have fulfilled their obligation under Rule 6 of the CCR. In view of these facts, benefit of Notification 67/1995-CE dated 16.03.1995 cannot be denied to the appellant. The impugned order is therefore, set aside and appeal is allowed.
(Pronounced in the open court on 24.04 .2023)
