2018 (5) TMI 1201 - AT - Central Excise

Benefit of N/N. 67/1995 dated 01.03.1995 - After exhausting the useful life, such moulds and dies were cleared to the customer (M/s Parryware) on payment of VAT /CST - Held that - moulds and dies will enjoy such exemption only as long as such goods remain within the factory of the appellant - In the present case, such moulds and dies after they become obsolete were cleared for home consumption. The monetary consideration has also been received by the appellant on which VAT stands paid - benefit of notification not allowed - appeal dismissed - decided against appellant.

Summary

Issues:
- Interpretation of Notification No. 67/1995 for exemption eligibility of moulds and dies used for captive consumption.
- Liability of duty payment at the time of clearance of moulds and dies to the customer.

Analysis:

1. Interpretation of Notification No. 67/1995:
The appeal involved a dispute regarding the applicability of Notification No. 67/1995 for exemption eligibility of moulds and dies used for captive consumption within the factory premises. The appellant argued that duty exemption was applicable as the moulds and dies were cleared only after becoming obsolete, citing a previous tribunal judgment. On the other hand, the Revenue contended that duty had been paid at the time of clearance of the moulds and dies to the customer. The Tribunal examined the facts and held that the exemption under Notification No. 67/1995 was available only as long as the moulds and dies remained within the factory premises for captive consumption. Upon clearance to the customer, duty was deemed payable on the transaction value, and the benefit of the notification was not applicable at that stage. The Tribunal distinguished the cited case law, emphasizing the unique circumstances of the present case.

2. Liability of Duty Payment at Clearance:
The central issue revolved around the liability of duty payment at the time of clearance of the moulds and dies to the customer. The appellant's position was that duty exemption applied upon clearance after the moulds and dies had become obsolete. However, the Revenue argued that duty had already been paid when the moulds and dies were cleared from the factory. The Tribunal considered the sequence of events, noting that the moulds and dies were initially used for captive consumption within the factory and later cleared for home consumption after becoming obsolete. It was established that duty was indeed payable at the time of clearance to the customer, based on the transaction value, and the exemption under Notification No. 67/1995 did not extend to this stage. Consequently, the impugned order was upheld, and the appellant's appeal was dismissed.

In conclusion, the Tribunal's judgment clarified the interpretation of Notification No. 67/1995 regarding duty exemption for moulds and dies used for captive consumption within the factory premises. It emphasized that duty payment was required at the time of clearance to the customer, distinguishing the case from previous judgments. The decision underscored the importance of compliance with duty obligations upon the removal of goods from the factory for home consumption, even after initial captive use.