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2016 (2) TMI 759 - CESTAT NEW DELHI

2016 (2) TMI 759 - CESTAT NEW DELHI - 2016 (334) E.L.T. 661 (Tri. - Del.) - Manufacture - captive consumption - Duty liability on oxygen produced and supplied to the contractor located within the premises of appellant - thrust of ld. Counsel’s argument is that the oxygen has not been cleared out of factory and hence exemption available in terms of notification No.67/95-CE, for captive consumption is rightly claimed by them - Held that:- We find that the original authority fell in error in examin .....

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needs do not take away the duty liability which may otherwise exist. FSNL have established a factory at a site provided by the appellant inside their factory premises as per contract agreement. The oxygen is cleared to FSNL and consumed by FSNL. The exemption contemplated under notification No.67/95 is available if inputs (here ‘oxygen’) manufactured in a factory is used within the factory of production. Oxygen produced by appellant is not used by appellants in their factory of production. The s .....

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ated 25.06.2007 of Commissioner (Appeals), Raipur. The appellants are engaged in the manufacture of iron and steel products liable to Central Excise duty. For processing scrap at Open Hearth Muck Dump area inside appellant s factory they gave a contract to M/s.Ferro Scrap Nigam Ltd. (FSNL) for lancing at the Dump area. FSNL process the scrap which in turn is used by appellant in or in relation to manufacture of final product. For the use of FSNL the appellant is supplying oxygen free of cost thr .....

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nt submitted that :- a) Clearance of oxygen through pipe-lines to FSNL will not amount to removal outside the factory. Benefit of notification No.67/95-CE is correctly claimed. b) There is no physical removal of exygen outside the factory of the appellant. The oxygen supplied through pipeline to FSNL is used within the factory only. Such clearance will not be a removal in terms of Rules 4 and 8 of Central Excise Rules, 2002. c) Notification No.67/95-CE is correctly availed by the appellants. The .....

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ion of recipient of the excisable goods is not relevant for duty liability. 4. We have heard both the sides and examined appeal records. The issue for decision is the duty liability of appellant on oxygen produced and supplied by them to their contractor located within the premises of appellant. The thrust of ld. Counsel s argument is that the oxygen has not been cleared out of factory and hence exemption available in terms of notification No.67/95-CE, for captive consumption is rightly claimed .....

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g their own factory premises, though within the factory complex of appellants. The business arrangement and need is such that the impugned goods (oxygen) is cleared through pipeline to FSNL premises for further use. FSNL are using the said oxygen in the scrap recovery operation and are not registered with central excise department for any payment of duty on any final products. We find that the original authority fell in error in examining the issue like ownership of goods, free of cost supply an .....

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exist. FSNL have established a factory at a site provided by the appellant inside their factory premises as per contract agreement. The oxygen is cleared to FSNL and consumed by FSNL. The exemption contemplated under notification No.67/95 is available if inputs (here oxygen ) manufactured in a factory is used within the factory of production. Oxygen produced by appellant is not used by appellants in their factory of production. The same is cleared to factory of FSNL and used by FSNL, though on .....

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