TMI Blog2012 (12) TMI 942X X X X Extracts X X X X X X X X Extracts X X X X ..... xemption from payment of duty on such inputs in terms of the opening paragraph of the Notification. This right is not hit by the opening portion of the proviso to the Notification as the manufacturer is squarely covered by the exception carved out of the proviso vide clause (vi) under the proviso. The Department, it appears, would like to drive the assessee out of the purview of this exception on the ground that the latter had not discharged the obligation prescribed in Rule 6 of the CENVAT Credit Rules 2004. We have already held that the assessee did not have any liability under sub-rules (1) to (4) of Rule 6 inasmuch as these sub-rules were not applicable, by virtue of sub-rule (6), to the assessee who were clearing their exempted fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty under Notification No.6/2006 CE dt. 01/03/2006. Therefore, according to the Revenue, the assessee was not entitled to claim the benefit of Notification No.67/95 CE dt. 16/03/1995 in respect of their intermediate product (copper wire) and consequently they ought to have paid appropriate duty on copper wire. This view made its way into show-cause notices wherein demands of duty on copper wire were raised on the assessee and penalties were also proposed. These demands/proposals were contested by the party. It was in adjudication of these disputes that the impugned orders were passed by the learned Commissioner of Central Excise. 2. Heard both sides. The learned counsel for the appellant has submitted that the provisions of sub-rules (1), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elevant period satisfied this condition. Against this backdrop, one has to read the provisions of Rule 6(6)(vii) of the CENVAT Credit Rules 2004. This sub-rule reads as follows:- (6) The provisions of sub-rules (1), (2), (3) and (4) shall not be applicable in case the excisable goods removed without payment of duty are either (i) (ii) (iii) (iv) (v) (vi) (vii) all goods which are exempt from the duties of customs leviable under the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) and the additional duty leviable under Section 3 of the said Customs Tariff Act when imported into India and supplied against International Competitive Bidding in terms of Notification No.6/2002-Central Excise dated the 1st March, 2002 or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heir factory for the manufacture of insulated (power) cables. According to the Revenue, the assessee s claim is hit by the proviso to the Notification, which reads as under: Provided that nothing contained in this notification shall apply to inputs used in or in relation to the manufacture of final products which are exempt from the whole of the duty of excise or additional duty of excise leviable thereon or are chargeable to nil rate of duty, other than those goods which are cleared, - (i) to a unit in a Free Trade Zone, or (ii) to a hundred per cent Export Oriented Undertaking, or (iii) to a unit in an Electronic Hardware Technology Park, or (iv) to a unit in a Software Technology Park, or (v) under notification No.108/95-Cent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dding in terms of Notification No.6/2006-CE ibid. In other words, a conjoint reading of sub-rule (6) of Rule 6 of the CENVAT Credit Rules 2004 and clause (vi) under the proviso to Notification No.67/95-CE ibid would show that the assessee s claim for exemption from payment of duty on copper wire under the Notification was not hit by the opening portion of the proviso to the Notification. 7. In the result, the assessee was not liable to pay CE duty on copper wire manufactured and captively used in the manufacture of insulated (power) cables in the factory during the material period. The impugned demands and the connected penalties are, therefore, liable to be set aside. It is ordered accordingly. 8. Both the appeals are allowed. (Opera ..... X X X X Extracts X X X X X X X X Extracts X X X X
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