Spray King Agro Equipment Pvt Ltd Vs C.C.E. & S.T. (CESTAT Ahmedabad)
Facts- The appellant is engaged in the manufacture of Brass parts of agricultural products falling under Chapter sub- heading 8424900 of the Central Excise Tariff Act, 1985. As per the Notification No. 03/2005-CE dated 24.02.2005, Brass parts of Agriculture Products are exempted from payment of Central Excise duty. The appellants are also manufacturing intermediate products, viz. Brass Casted Rods at their own factory and also getting it manufactured at the place of Job worker. They used Brass Casted Rods captively. On this captive consumption of the Brass Casted Rods which are used for the manufacture of final product, the appellant claimed exemption under Notification No. 67/95-C.E., dated 16-31995, Notification 83/94-CE and 84/94 – CE both dated 11.04.1994. The appellants were issued show cause notice proposing demand of excise duty of Rs. 11,55,62,312 on intermediate goods viz. casted brass rods manufactured by them and manufactured on job work basis. The demand of duty was confirmed by the Commissioner vide the impugned order and penalty equivalent to the duty under Section 11AC was also imposed. In addition, personal penalty of Rs 5,00,000/- was also imposed on Shri Hiteh P. Dudhagra, Director, of the appellant Company. Therefore, the appellants are before us.
Conclusion- Observed that Notification No. 67/95-the exemption is not available to the intermediate goods used in the exempted goods, but the exception was provided even if the final product is exempted, for that the assessee discharged the obligation prescribed in Rule 6 of Cenvat Credit Rules, then in spite of the final product is exempted, the exemption on the intermediate goods is available in terms of the aforesaid notification.
Held that central Excise duty not payable on intermediate products, used captively in manufacture of exempted final products.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
These appeals are directed against Order-Original No. 55/Commissioner/2013 dated 30.03.2013.
2. The fact of the case is that appellant is engaged in the manufacture of Brass parts of agricultural products falling under Chapter sub- heading 8424900 of the Central Excise Tariff Act, 1985. As per the Notification No. 03/2005-CE dated 24.02.2005, Brass parts of Agriculture Products are exempted from payment of Central Excise duty. The appellants are also manufacturing intermediate products, viz. Brass Casted Rods at their own factory and also getting it manufactured at the place of Job worker. They used Brass Casted Rods captively. On this captive consumption of the Brass Casted Rods which are used for the manufacture of final product, the appellant claimed exemption under Notification No. 67/95-C.E., dated 16-31995, Notification 83/94-CE and 84/94 – CE both dated 11.04.1994. The appellants were issued show cause notice proposing demand of excise duty of Rs. 11,55,62,312 on intermediate goods viz. casted brass rods manufactured by them and manufactured on job work basis. The demand of duty was confirmed by the Commissioner vide the impugned order and penalty equivalent to the duty under Section 11AC was also imposed. In addition, personal penalty of Rs 5,00,000/- was also imposed on Shri Hiteh P. Dudhagra, Director, of the appellant Company. Therefore, the appellants are before us.
3. Shri P.D Rachchh, Learned Counsel for the appellant submits that in the present matter they have not availed the Cenvat Credit under Cenvat Credit Rules 2004, therefore they complied the provisions of / discharged obligation under Rule 6 of the CCR, 2004. Thus, eligible for exemption for intermediate goods viz. Brass Cast Rods manufactured in their factory and used captively for manufacture of parts of Agriculture Equipments in terms of clause (vi) of Notification No. 67/95-CE dated 16.03.1995. In this regard he placed reliance on the following judgments:
(i) Funskool (India) Ltd. Vs Commr. of Central Excise &Cus., Goa-2017(357)ELT434 (Tri.-Mumbai)
(ii) Sagar Industries & Distilleries Pvt. Ltd. Vs. Commr. C.Ex. &Cus., Nasik – 2016(344) ELT 537 (Tri.- Mumbai)
(iii) Sakthi Sugars Ltd. Vs Commr. of C.Ex, Salem – 2008(230)ELT676 (Tri.-Chennai)
(iv) Commissioner Vs. Sakthi Sugars Ltd. – 2016(332) ELT A194(SC)
(v) Ultratech Cements Ltd. Vs. Commissioner of C.Ex& S.T., Tiruchirapalli – 2016(343) ELT 164 (Tri.- Chennai)
3.1 He alternatively claimed that Cast Brass Rods manufactured in factory were exempted in terms of Sr. No. 2 of Notification No. 8/2003-CE dated 01.03.2003 which reads as under:
