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M/s. J.K. Tyre & Industries Ltd. Versus CCE & ST, Indore

2016 (12) TMI 224 - CESTAT NEW DELHI

Exemption 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 a .....

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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 .....

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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 supp .....

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he 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 impos .....

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order No.214-215/2005 dated 25.01.2005 rejected the department s appeal on the ground that the issue of classification of cord fabrics stands settled by the Larger Bench of the Tribunal in the case of Vikrant Tyres Ltd. - 1997 (90) ELT 178 (T-LB). Against this order, the Department filed appeal before the Hon ble Supreme Court which vide order dated 8.5.2007 remanded the matter to the Original Adjudicating Authority for a fresh decision. The Original Authority decided the case vide impugned orde .....

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ating to classification and duty liability of the said dipped rubberized fabrics . The appellants claimed exemption 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 .....

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o the Hon ble Supreme Court, who remanded the issue to the Original Authority for a fresh consideration. The portion of the remand directions of the Hon ble Supreme Court are as below:- In our view since the entire earlier round of litigation has proceeded on the basis of the applicability of the above two judgements in the case of Falcon Tyre Ltd. and Vikrant Tyres Ltd. and since we have drawn a distinction between dipped tyre cord fabric and rubberized tyre cord fabric in the case of MRF Ltd. .....

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abric then the same shall be classifiable under Chapter Heading 59.05 as held by this court in the case of MRF Ltd. However, if the product remains dipped tyre cord fabric then the Department has to give a finding both on marketability as well as on the manufacture of the product and decide the matter accordingly in the light of the judgement of this Court in MRF Ltd. Lastly, the Department will consider also as to whether in the present case the assessee has made use of the fabric of high densi .....

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assed in such de novo proceedings is contested by the appellant on various grounds. The main points are as below:- (A) The impugned order is passed in violation of the order of the Hon'ble Supreme Court as the Original Authority did not consider in detail the judgement in the case of MRF Ltd. 2005 (180) ELT 145 (SC); (B) Excise duty cannot be demanded as no manufacture is involved in producing the impugned goods and the said goods are not at all marketable. The Dipped Rubberized Tyre Cord Fa .....

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haracter or use in the said process; (C ) The goods merit classification under CETH 5906 and the Commissioner has erroneously classified the product under CETH 5902; (D) Without prejudice to the above, exemption was rightly available for Additional Duty of Excise under Notification No.67/95. The wordings of the notification should be read as applicable to the Additional Duty of Excise also as the provisions of Central Excise Act, 1944 were made applicable to the Act, 1956 under which Additional .....

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directions have been fully followed by the Original Authority and a perusal of the order will show that minute and detailed examination of the nature of the product and legal principles applicable to decide the case have been dealt with. He drew our attention to the clear finding of the Original Authority recorded in para 3 (B), 3 (C) and 5 of the impugned order. 6. We have heard both the sides and perused the appeal records. 7. The impugned order examined in detail the process of manufacture o .....

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cation in the present case is limited to the classification of Rubberisation Stage-I Dipped fabric only. After examining Note-IV of Chapter 59 of Central Excise Tariff, the Original Authority concluded that applying the principle of predominance, the product of Rubberisation Stage-I dipped fabric is correctly classifiable under CETH 5902. 9. It is relevant to note that the appellant themselves declared dipped rubberized fabrics (pre-rubberisation stage) under CETH 5902.10 for clearance of the pr .....

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mselves were clearing the said product to their own plant at Kankroli as declared by them to the Department. We note that there is no common or uniform standard to determine the marketability of any given product. 10. In the present case, 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 b .....

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s distinct commodity but is also capable of being transported by the road long distance and capable of being bought and sold. 11. After careful examination of the impugned order and the appellant s submission, we find no reason to interfere with the findings of the lower authority. 12. 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 t .....

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