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2013 (11) TMI 880 - AT - Central ExciseValuation of Niacin - Captive consumption - job work - manufacture niacin and such niacin captively consumed in the manufacture of ‘niacin feed premix’ - Rule 8 of the Central Excise Valuation (Determination of price of Excisable Goods) Rules 2000 – Entitlement for Exemption under Notification No.10/96 – Eligibility for Cenvat credit – Held that:- ‘Niacin feed premix’ is manufactured by the appellant was not animal feed for which it is not entitled to the duty exemption on niacin - ‘animal feed premix’ was branded as ‘Proolay N95’ which is distinct goods without that being an animal feed - Appellant failed to prove that it manufactured animal feed in essence and substance what that is commonly understood in the market - Niacin feed premix and animal feed are two distinct goods as may be appreciated from their nature and class as is revealed from Chapter 39 of Central Excise Tariff Act, 1985 because chapter 23 has recognised preparation of a kind used in animal feeding without that being animal feed – it does not say animal feed supplement is same as animal feed. Following CCE, Guntur vs. Surendra Cotton Oils Mills & Fert. Co. [2000 (12) TMI 103 - SUPREME COURT OF INDIA] - The appellant only manufactured a mixture of chemicals in its factory which is called as Niacin Feed Premix but did not manufacture animal feed in the same factory using niacin - thus it was not eligible to the duty exemption under the notification - Legislature consciously granted duty exemption to the intermediate product if such product is used in the same factory to manufacture the notified finished goods under Notification No. 10/96-CE - Such exemption being granted at public cost that cannot be liberally construed to grant undue benefit to the appellant – Thus the benefit of duty exemption on niacin was rightly rejected. Duty shall be levied on niacin in accordance with law and the goods in question shall be valued in accordance with CAS -4 - No cenvat credit is available on niacin being used in the goods subjected to nil rate of duty - Interest on duty demand would be leviable - No penalty shall be levied on the appellant for the confusion of the legal position – Decided against Revenue.
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