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2015 (11) TMI 1413 - SC - Central ExciseManufacture - dutiability of the intermediary product 'Clinker' - captive consumption - whether the product "Clinker" is covered by the Exemption Notification No. 67/1995 - Held that:- Clinker is used as input for production of Cement and Cement is exempted from the excise duty. Therefore, by virtue of this proviso insofar as Clinker is concerned, Exemption Notification would not apply. However, the matter does not end here inasmuch as the proviso itself is not applicable under certain circumstances as mentioned therein, viz., in respect of those goods which are cleared under six circumstances. We are concerned here with clause (vi) which states that if goods are cleared by a manufacturer of dutiable and exempted final products after discharging the obligation prescribed in Rule 6 of the CENVAT Credit Rules, 2001, then proviso would not apply. The case set up by the appellant therefore, was that since the exempted goods ('Cement') is cleared by the appellant who is a manufacturer of (a) 'dutiable final products' ('Clinker') and (b) 'exempted final products' ('Cement') after discharging the "obligation" prescribed in Rule 6 of the CENVAT Credit Rules, 2001, clause (vi) of the notification applies. Applicability of Rule 6 of Cenvat Credit Rules - Held that:- As per the CESTAT, Rule 6 applies only if some final product is partly exempt and partly dutiable. However, we do not find any such restriction in Rule 6 which contemplates the situation where a manufacturer produces (a) final products which are chargeable to duty, as well as (b) exempted goods. The Rule does not provide that the same final product should be partly dutiable and partly exempted. On the contrary, this Rule relates to taking of CENVAT Credit in respect of 'inputs'. Reversal of Cenvat Credit - Rule 6 is not applicable as such in its totality since taking of CENVAT credit is not in issue in these cases. On the other hand, relevance of this Rule is only to the extent of 'obligation' contained in the said Rule which is to be discharged. A plain reading of clause (vi) of the notification would show that it only contemplates a situation where 'a manufacturer manufactures both dutiable as well as exempt final products'. There may be different final products manufactured by the same manufacturer. The final products may be made out of the same product or out of different products. Clause (vi) does not contemplate that the manufacturer should manufacture only 'one final product' or that if he manufactures only one product that product itself should be both dutiable and exempted. The basis adopted by the CESTAT that the 'same final product' should be partly dutiable and partly exempt, is neither a requirement of clause (vi) nor a requirement of Rule 6. - Impugned order is set aside - Decided in favour of assessee.
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