TMI Blog2018 (11) TMI 300X X X X Extracts X X X X X X X X Extracts X X X X ..... at nothing contain in this Notification shall apply to inputs used in or relation to the manufacture of final product which are exempted from the whole duty of excise or chargeable to nil rate of duty, however the exception to this Proviso is provided in respect of supplies meant as mentioned in Clause I to V and also under Clause (VI) when the obligation prescribed in Rule 6 of Cenvat Credit Rule, 2001 is discharged. The Exemption is available in respect of inputs used captively even though the final product is cleared under exemption as per Rule 6(6)(vii) of Cenvat Credit Rules, 2004 since the appellant’s supply of final product is under N/N. 6/2006-CE. The issue is decided in the case of M/S. KEI INDUSTRIES LTD., N HASHMI VERSUS COMMISSIONER OF CENTRAL EXCISE [2016 (12) TMI 532 - CESTAT NEW DELHI], where it was held that As facts of the case are not disputed that the appellant is manufacturing final products and clearing the same on payment of duty in the open market and to Mega Power Projects without payment of duty. In that circumstances, the appellant is entitled for benefit of N/N. 67/1995 ibid for intermediate product emerging during the course of manufacture of final pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Revenue reiterates the findings of the impugned order. 4. We have carefully considered the submissions made by both the sides and perused the records, we find that the appellant have manufactured Clinker which is an intermediate product and the same was consumed in the manufacturing of other final product i.e. Cement. The said final product i.e. Cement has been cleared against International Competitive Bidding in terms of Exemption Notification No. 6/2006-CE dated 01.03.2006, according to which the rate of duty is nil. The appellant availed Exemption Notification in respect of the Clinker under notification 67/95-CE which reads as under: In exercise of the powers conferred by subsection (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), read with sub-section (3) of section 3 of the Additional Duties of Excise (Goods of Special Importance Act, 1957 (58 of 1957), (herein after referred to as the said Special Importance Act), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts. i) capital goods as defined in rule 3 of the CENVAT Credit Rules, 2002, manufactured in a factory and used within the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iso is provided in respect of supplies meant as mentioned in Clause I to V and also under Clause (VI) when the obligation prescribed in Rule 6 of Cenvat Credit Rule, 2001 is discharged. The Exemption is available in respect of inputs used captively even though the final product is cleared under exemption as per Rule 6(6)(vii) of Cenvat Credit Rules, 2004 since the appellant s supply of final product is under Notification no. 6/2006-CE. The appellant has discharged the obligation prescribed in Rule 6 of Cenvat Credit Rules, 2004, therefore, even though the final product of the appellant is cleared under exemption from the whole of the duty but since it is under Notification 6/2006-CE in terms of Rule 6(6)(vii) of Cenvat Credit Rules, the Notification No.67/95-CE is legally eligible to the supply made by the appellant. This issue has been considered in the case of Thermo Cables Ltd (Supra) wherein the Tribunal has passed the following order: 4. After considering the submissions, we have found great force in the submissions made by the learned counsel. It is not in dispute that the final products were cleared without payment of duty under Notification No.6/2006 CE which, at Sl.No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts. Input must be one of those specified in the first column and the final product must be one of those specified in the second column of the table annexed to the Notification. Admittedly, copper wire is one of the inputs and the power cables manufactured and cleared by the assessee are final products covered by the Notification. However, the Department would like to deny the benefit of this Notification to copper wire manufactured by the assessee and captively consumed in their factory for the manufacture of insulated (power) cables. According to the Revenue, the assessees 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 Technolog ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td (Supra) wherein the Coordinate Bench of this Tribunal following the Thermo Cables Ltd judgment passed following order: 7. On careful consideration of submissions of both the sides, the short issue emerges before us is whether the appellants are liable to pay the duty on intermediate product i.e. armoured cable, which has been used for manufacture of power cables which is ultimately cleared on payment of duty in the open market and to Mega Power Projects without payment of duty. 8. An identical issue came up before the Tribunal in the case of Thermo Cables Ltd. (supra) wherein this Tribunal observed as under: 4. After considering the submissions, we have found great force in the submissions made by the learned counsel. It is not in dispute that the final products were cleared without payment of duty under Notification No. 6/2006-C.E. which, at Sl. No. 91 thereof, prescribed nil rate of duty for all goods (falling under any chapter) supplied against international competitive bidding. This exemption was subject to the condition that the goods were exempted from basic customs duty and additional duty of customs when imported into India. It is not in dispute that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Department would like to deny the benefit of this Notification to copper wire manufactured by the assessee and captively consumed in their factory for the manufacture of insulated (power) cables. According to the Revenue, the assessees 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-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. 6. From the above proviso to Notification No. 67/95-C.E. ibid, it appears that the ..... 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