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2023 (10) TMI 872 - AT - Central ExciseExemption for Captive Consumption - quantity of coal captively used for further production/manufacture of coal within the mines - denial of benefit of N/N. 67/95 on the ground that the coal is ‘produced’ and not ‘manufactured’ - HELD THAT:- The grounds of denial of Cenvat credit very strange. The Appellant has opted for payment of Central Excise Duty at the normal tariff rate of 5% with CENVAT credit facility”, which is not in dispute. Having allowed the CENVAT credit facility, which is available on inputs used in the manufacture of final product, the Authorities have inprinciple accepted that the “activity of coal mining amounts to manufacture”. The department has not raised any objection to payment of duty by the Appellant by treating the process as amounting to ‘manufacture’. In fact, the very demand in the Notice has been raised by charging duty at the rate of 5%, which is applicable along with Cenvat facility. For the purpose of demanding duty on coal, the Department considers that the Coal mining activity would amount to ‘manufacture’. But, the very same coal mining activity has been considered as not amount to ‘manufacture’ for the purpose of consideration of exemption under Notification No. 67/95. Thus, there is no merit in the impugned order that has denied the benefit of Notification No. 67/95 to the Appellant for the coal consumed captively. The Appellant is eligible for the benefit of Notification No. 67/95 for the coal consumed captively to generate steam to be used as power for the purpose of lifting coal within the mines - the demand confirmed in the impugned order is not sustainable - Appeal allowed.
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