Home Case Index All Cases Central Excise Central Excise + AT Central Excise - 2016 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (12) TMI 224 - AT - Central ExciseExemption under notification no.67/95-CE dated 16.03.95 for captively consumed goods - The dispute of classification is between the Central Excise Tariff Heading 5902 and 5906. Notification No.67/95-CE allowed exemption for dipped fabrics from whole of basic excise duty when used for the manufacture of final dutiable products. Since the appellants are using Dipped Rubberized Fabrics captively in the manufacture of Nylon Tyres, they are entitled to avail such exemption. However, no exemption is available from payment of Additional Excise Duty leviable under Additional Duties of Excise (Goods of Special Importance) Act, 1956 on such captive consumption. Held that: - the dispute of classification in the present case is limited to the classification of Rubberisation Stage-I Dipped fabric only - it is noted that the product is having shelf life and is also being transported as evidenced from the appellant s own declarations. The length of the shelf life is immaterial as long as it can be established that the product has got identify and is capable of being marketed. The actual sale of such product need not be established in each case. In this connection, reference can be made to the decision of the Hon ble Supreme Court in Cadila Labs. Pvt. Ltd. [2003 (2) TMI 65 - SUPREME COURT OF INDIA]. In the present case, it has been clearly shown that the product has been actually transported by road by the appellant on payment of duty for being used several kms away for the manufacture of excisable goods. This will indicate that the product will not be only classifiable as distinct commodity but is also capable of being transported by the road long distance and capable of being bought and sold. Regarding appellant's claim for exemption of Additional Excise Duty under Notification no.67/95-CE, we note that the said notification grants exemption only for basic excise duty i.e. duty of excise specified in the schedule to the Central Excise Tariff Act, 1985. This issue has been examined by the Original Authority, who noted that the Board vide Circular dated 22.01.2001 categorically clarified that the classification of Tyre Cord Warp Sheet is covered under Heading No.5902 on which AED is leviable from 16.03.1995 to 01.06.1998. The appellants are held liable to pay duty on dipped rubberized fabrics manufactured by them in their factory, they are rightly eligible for modvat credit of the duty paid on inputs used in such manufacture. On submission of proper supporting documents and records, such credit shall be available to them to discharge duty on dipped rubberized fabrics. Regarding the penalties imposed on the appellants, we note that the whole issue involved is interpretation involving classification of impugned goods, which are manufactured and captively used by the appellants. No allegation of any intentional contravention of provisions of law has been alleged or discussed by the lower authority. The Original Authority only recorded that the appellant did not deposit the full liability demanded in the seven notices and hence the penalty. We find that imposition of total penalty of ₹ 30 Lakhs in the present case is not justifiable and cannot be sustained. The penalties are accordingly set aside. The classification and duty demand as made in the impugned order is sustainable - The modvat credit wherever supported with due documents shall be available to the appellant to discharge the duty liability - The penalties imposed are set aside - appeal disposed off.
|