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2001 (10) TMI 91 - SC - Central ExciseWhether the Notification No. 95/79 did not have any condition that there should be nexus between the inputs and outputs? Held that:- What is exempted is "so much of the duty of excise leviable thereon". The expression 'thereon' is referable to excisable goods described in column (5) - known as 'final products'. The extent to which it is exempted is limited to the duty of excise leviable and already paid on the goods of the description specified in column (3) - known as 'inputs'. In other words, the duty paid on the inputs is adjusted against the duty payable on the final products manufactured out of the said inputs and the balance only is liable to be paid on the finished products. Thus, the excise duty payable on the final products or outputs has inextricable nexus with the duty paid on inputs for which the credit of duty is allowed in accordance with the procedure laid down in Rule 56A. The exemption notification pre-supposes that the duty is otherwise payable on the finished products specified therein. There is no question of applying this notification to the finished products (in this case tyres, tubes and flaps) if they are not subjected to any duty. We find it difficult to accept the contention that the omission of clause (ii) of the proviso contained in the earlier Notification No. 95/79 is significant. The omission of provision similar to clause (ii) of the proviso to Notification No. 95/79 does not, in our view, advance the case of the respondent. Even the words employed in the opening part of the Notification No. 95/83 are sufficient enough to take care of a situation which was provided for expressly in the proviso to Notification No. 95/79. We, therefore, see no force in this contention. Thus far from coming to the aid of the respondent the view expressed by the Delhi High Court makes it clear that the question of utilising the credit on inputs would arise only where the duty is payable on finished product.
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