2009 (12) TMI 819

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..... ufactured by the appellant. Revenue took a stand that since the goods were fully exempted, the appellants could not have paid the duty on finished products. However, aluminum circles manufactured by the appellant which was intermediate product, was liable to excise duty during the relevant time and the impugned order has been passed holding that the appellants are liable to duty on aluminum circles manufactured and utilized within the factory for manufacture of aluminum tableware, kitchenware etc. While the duty already paid by the appellant on the finished goods cannot be considered as duty since they were exempted and therefore to be treated as deposit, the appellants are liable to pay duty on the aluminum circles since when intermediate .....

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..... permitting either deferment or non-payment of duty on intermediate goods. Further, he also submitted that Board vide Circular No. 303/19/97-CX, dated 11-3-97 clarified that when the intermediate goods and exported goods are manufactured in same factory, there is no need to pay duty on the intermediate product and requirement of Chapter procedure also need not be insisted upon. 3. Learned SDR, on the other hand, drew our attention to the provisions of Notification No. 67/95-C.E., dated 16-3-95 and submitted that once the finished products are exempted from the payment of duty of excise leviable thereon or rechargeable to Nil rate of duty, exemption under Notification No. 67/95-C.E., would not be available for the intermediate goods even i .....

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..... option to pay the duty. However, this has been countered by the learned SDR by citing the decision of the Tribunal in Mahendra Chemicals ibid. The fact remains that in this case rebate has been sanctioned which amounts to admission of the fact that what was paid by the appellant was Central Excise duty. Therefore, once it is held that what was paid on the final product was Central Excise duty, appellants become eligible for exemption under Notification No. 67/95-C.E., dated 16-3-95. In any case, we find that whole exercise is Revenue neutral. Even if the appellants had not paid the duty on the finished product, they would have been eligible for rebate of Central Excise paid on the raw material. Therefore, we do not find any merit in the po .....

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