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2017 (11) TMI 281 - AT - Central ExciseRestoration of appeal - N/N. 5/1998-CE dated 2nd June 1998, N/N. 6/2000-CE dated 1st March 2000 and N/N. 3/2001-CE dated 1st March 2001 - utilisation of materials procured against CT-2 form by which goods are eligible to be procured at concessional rate of duty subject to fulfillment of the conditions prescribed in notification - Revenue alleged that the materials received against these CT-2 forms had not been used in the manufacture of power driven pumps designed for pumping water - inclusion of value of exempt raw material in the assessable value of ineligible finished goods - whether compliance with the mandatory condition prescribed in N/N. 5/1998-CE dated 2nd June 1998 is sine qua non and failure to comply with such condition can be visited with denial of duty exemption? Held that: - The facts relating to the procurement of goods by availing the conditional exemption and the utilisation of the goods is not in dispute - Undoubtedly, duty is leviable as per rule 6 of erstwhile Central Excise (Removal of Goods at Concessional Rate of Duty for the Manufacture of Excisable Goods), 2001 on goods procured in accordance with this procedure. That, however, is intended to provide legal sanctity for payment of duty by the buyer of goods cleared without payment of duty. This has been duly acknowledged in the order of the lower authority for confirmation of the demand on goods cleared as such, i.e., bought out. For the goods that were not so cleared but were used in manufacture of goods other than that intended in the exemption notification or used otherwise, the first appellate authority has considered the payment of duty on clearance at a value inclusive of the inputs to be sufficient compliance. The specific provision in the Rules supra for clearance as bought out items does not cover other clearances. All manufactured goods, to the extent that they are not exempted, are required to be cleared on payment of duty. The exemption availed on the goods procured by the appellant enabled the manufacturer to clear the goods without payment of duty but which, nevertheless, requires the recipient to discharge the burden of duty liability in the event of non-utilisation of the goods for the intended purpose. The liability to discharge duty on the goods manufactured out of the inputs so procured remains unchanged and is mandated in the Central Excise Act, 1944; discharge of that liability will not suffice to make good the duty liability that was waived under the exemption notification. The order of the original authority is restored - appeal allowed being restored, as sought.
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