TMI Blog2016 (12) TMI 215X X X X Extracts X X X X X X X X Extracts X X X X ..... X does the appellant be eligible to clear the goods without payment of duty. Thus the exemption from payment of duty is based upon fulfillment of conditions by the appellant or the buyer. Therefore at the time of manufacture the appellant cannot ascertain with full confidence that the end product is exempted from duty. The exemption being contingent upon conditions, it cannot be said to warrant a situation to maintain separate accounts. The demand raised alleging that pre-fabricated construction and stationary pre-cooling equipments cleared without payment of duty on the strength of C.T-2 certificate are exempted goods is not sustainable - demand not sustainable - appeal allowed - decided in favor of appellant. - Appeal No. E/21568-215 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellant procures input i.e. Sulphur and Vanadium Pentoxide (V205) catalyst which is duty paid and also receives certain input services such as handling and/or GTA service used for inward transportation of above input. The Appellant has availed the benefit of CENVAT credit of eligible/specified duties in respect of Sulphur and certain input services which were used for manufacture of Sulphuric Acid as stated above. 3. The department issued show cause notice inter alia, alleging that appellant has been using common input and input services in the manufacture of exempted goods as well as dutiable goods without maintaining separate accounts as envisaged under Rule 6(2) of CENVAT Credit Rules, 2004 and thereby is liable to pay amount of 10% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8/2015-16 dated 04.08.15 3,88,348 97,000 E/21924/2015 January 2013 to March 2013 37/2014 dated 02.12.13 079/2015-16 dated 04.08.15 3,88,348 97,000 64,57,854 57,29,226 4. The Ld. Counsel for appellant Shri. N. Anand submitted that the sulphuric acid cleared by the appellant without payment of duty (under chapter X procedure) cannot be considered as an exempted good and therefore the said provisions of Rule 6 are not applicable. He submitted that the issue is covered and relied upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r X procedure without payment of duty is no longer res integra. The issue has been analysed in various judgements and the same has been decided in favour of the assessee. 7. In Aureola Chemicals Ltd V/s. CCE, Indore [2004 (175) ELT 148 (Tri-De) the Tribunal held that the spent Sulphuric Acid cleared by assessee under Chapter X procedure to various manufacturers of fertilizers against CT-2 certificate without payment of duty are not exempted goods. The Tribunal in said case observed as under: 8. The appellants were clearing the Spent Sulphuric Acid under Chapter X Procedure to various manufacturers of fertilisers against CT-2 Certificate. As per the provisions of Rule 192 of Chapter X Procedure of Central Excise Rules where th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecified purpose, goods are liable to duty. In this situation, the goods cleared under Chapter X Procedure cannot be said to be exempted from whole of the duty or are chargeable to Nil rate of duty. In view of the above discussion, the impugned order is set aside and the appeal is allowed. 8. In Hindustan Zinc Ltd V/s. UOI [2008 (223) ELT 149 (Raj)] the Honourable High Court of Rajasthan had occasion to consider whether the legality of the demand raised on the ground that appellant failed to maintain separate accounts in respect of goods cleared on payment of duty and goods cleared under chapter X procedure without payment of duty. The Honourable Court observed as under: 21. Significantly this provision postulates making of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exempted goods. Sulphuric acid is leviable to excise duty. Only on following the procedure under chapter X does the appellant be eligible to clear the goods without payment of duty. Thus the exemption from payment of duty is based upon fulfillment of conditions by the appellant or the buyer. Therefore at the time of manufacture the appellant cannot ascertain with full confidence that the end product is exempted from duty. The exemption being contingent upon conditions, it cannot be said to warrant a situation to maintain separate accounts. 10. The Co-ordinate Bench of the Tribunal in the case of CCE, Indore Vs S.R.F Ltd., [2008 (223) ELT 508 (Tri-Del)] held the issue in favour of assessee. This order of the Tribunal was upheld by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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