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2009 (9) TMI 547 - AT - Central ExciseEngines- Captively consumed- The appellants are engaged in manufacture of tractors classifiable under Chapter Heading No. 87.01 of the Central Excise Tariff Act, 1985. They also manufacture engines which are required to be part of the tractors and which are classifiable under Heading 8408 of the said Act. The tractors are exempted from the payment of excise duty in terms of Notification No. 23/2004-C.E., dated 9-7-2004 and No. 6/2006-C.E., dated 1-3-2006. During the inspection it was found that the appellants did not pay the duty in relation to the engines classifiable under Heading 84.08. It was also found that such engines were captively used for manufacture of tractors which are entitled for exemption in terms of the said Notification. Held that- statutory Note 2 to section XVII was in existence since 1986 and Notification issued with full knowledge thereof did not make any provision contrary thereto. Since the Notifications had to be read strictly and their language was clear, section note could not restrict ambit of their exemption, CBEC understanding of issue was same as reflected in C.B.E. & Circular No. 839/16/2006-CX, dated 16.11.2006. Exemption allowed for engines since only condition of their being captively consumed in factory of production satisfied.
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