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TMI Blog2018 (7) TMI 980X X X X Extracts X X X X X X X X Extracts X X X X ..... product. The case of the department is that the conversion from plastic granules to plastic powder is amount to manufacture of excisable goods. Since the said intermediate excisable goods i.e. plastic powder is used for manufacture of exempted final product i.e. interlining, it is liable to excise duty. The appellant claimed that though they are manufacturing exempted goods under Notification 31/04-CE, they are entitled for exemption on intermediate goods i.e. plastic powder in terms of Notification No. 67/1995-CE for the reason that they have not claimed the Cenvat Credit and they have complied with the Rule 6(1) of the Cenvat Credit Rules, 2004. However, the same was not considered by the lower authorities and confirmed the demand in resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o, hereby exempts - (i) capital goods as defined in the CENVAT Credit Rules, 2002 manufactured in a factory and used within the factory of production; (ii) goods specified in column (1) of the Table hereto annexed (hereinafter referred to as 'inputs') manufactured in a factory and used within the factory of production in or in relation to the manufacture of final products specified in column (2) of the said Table; From the whole of the duty of excise leviable thereon which is specified in the Schedules to the Central Excise Tariff Act, 1985 (5 of 1986) or additional duty of excise leviable thereon, which is specified in the Schedule to the said Special Importance Act. Provided that nothing contained in this notification shall apply to in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Proviso to Notification 67/1995-CE, the appellant became eligible for exemption Notification No. 67/1995-CE in respect of their intermediate inputs i.e. plastic powder. This issue has been considered by the Division Bench of Mumbai of this Tribunal in the case of Funskool (India) Ltd. (supra) wherein the following order was passed. 4. We have carefully considered the submissions made by both the sides. From the original order, we find that the adjudicating authority denied the exemption Notification No. 67/95-C.E. in respect of packing boxes used captively for manufacture of exempted goods on the ground that the appellant have not fulfilled Rule 6(2) of Cenvat Credit Rules. Accordingly they have not discharged obligation provided under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anufacture 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-Central Excise, dated the 28th August, 1995, or (vi) by a manufacturer of dutiable and exempted final products, after discharging the obligation prescribed in rule 6 of the Cenvat Credit Rules, 2001. TABLE Description of Inputs Description of final products (1) (2) All goods falli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the obligation under Rule 6 of Cenvat Credit Rules, 2000 which is reproduced below : "Rule 6. Obligation of manufacturer of dutiable and exempted goods. - (1) The Cenvat credit shall not be allowed on such quantity of inputs which is used in the manufacture of exempted goods, except in the circumstances mentioned in sub-rule (2). (2) Where a manufacturer avails of Cenvat credit in respect of any inputs, except inputs intended to be used as fuel, and manufactures such final products which are chargeable to duty as well as exempted goods, then, the manufacturer shall maintain separate accounts for receipt, consumption and inventory of inputs meant for use in the manufacture of dutiable final products and the quantity of inputs mean ..... X X X X Extracts X X X X X X X X Extracts X X X X
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