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2018 (11) TMI 8 - CESTAT MUMBAICaptive consumption - part of the sulphuric acid manufactured by them is being used in demineralisation of water, which is being used by them captively for further manufacture of their final product - N/N. 67/95-CE dated 16.3.1995 - denial of benefit on the ground that DM water is the appellant’s final product and is exempted from payment of duty. Held that:- The Hon’ble Supreme Court in the case of CCE, New Delhi vs. Hindustan Sanitaryware & Industries [2002 (9) TMI 103 - SUPREME COURT OF INDIA], has dealt with an identical issue. It stands held by the Hon’ble Supreme Court that exemption to captive consumption of modvatable inputs is available even if intermediate product is exempt from duty, but final output is dutiable. As such it was held that plaster of paris used in making of moulds which in turn are used as inputs in relation to the manufacture of sanitaryware, would be eligible to exemption under Notification No.217/87-CE, which was an exemption on account of captive consumption. Inasmuch as, admittedly, the DM water comes into existence during the course of manufacture of the final product and is used captively, the same has to be held as an intermediate product and not a final product. In such a scenario, the same would earn exemption of captive consumption Notification No.67/95-CE dated 16.3.1995. Appeal allowed - decided in favor of appellant.
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