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TMI Blog2025 (4) TMI 754X X X X Extracts X X X X X X X X Extracts X X X X ..... anufacture of dutiable final product i.e. Aluminium metal. The said capital goods were captively consumed after availing the benefit of exemption notification no. 67/1995-CE dated 16.03.1995 as amended. 2. The Learned Counsel appearing on behalf of the appellant submits as under:- 3.1. A Show Cause Notice dated 01.10.2004 was issued to the Appellant invoking the extended period of limitation and alleging wrongful availment of Cenvat Credit on such inputs amounting to Rs. 55,53,428/-, along with imposition of interest and penalty. The summary of the allegations of the SCN is provided herein-below for ease of reference: * Prior to 01.04.2000, Rule 57D(2) of the erstwhile CER stated that credit of specified duty shall not be denied or varied on the ground that any intermediate products have come into existence during the course of manufacture of final product or the inputs are used in manufacture of capital goods as defined under Rule 57Q and such intermediate product or capital goods are not chargeable to duty of excise. * The said rule was not available in the amended rules i.e., Central Excise (Second Amendment) Rules, 2000, effective from 01.04.2000. * Though R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellant submits that the inputs have been used in the manufacture of capital goods, which are 'intermediates', which have been further used in the manufacture of dutiable final product. Therefore, Cenvat credit is duly admissible to the Appellant. 3.7 The Appellant submits that the said capital goods are intermediate products, though the same were exempted under Notification No. 67/95-C.E. It is submitted that that a particular product may be a final product in respect of a particular goods but the same may be an intermediate product in respect of other goods. Had the Aluminium Bus Bars and Anode Stem been cleared on payment of duty by the Appellant, they would be considered as final products. But as they are captively used in the factory itself, for manufacture of dutiable aluminium, such goods becomes intermediate products. As such, the Cenvat credit of the inputs used in the manufacture of capital goods, which are intermediates and further used in the manufacture of final products, are admissible for credit in accordance with Rule 57AA of the CER, even after 01.04.2000. 3.8 Reliance in this regard is placed upon the Circular No. B/4/7/2000-TRU dated 03.04. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal in the case of CCEx. Vs. Hindustan Aluminium Com. (80) ELT 287 (Tribunal) involving the identical issue relatable to availment of set-off credit reported in 1995 under erstwhile Notification 201/79. The said decision has since been confirmed by the Hon'ble Supreme Court when an appeal filed by the Revenue was dismissed as reported in 1996 (84) ELT A 53. The Revenue in their memo of appeal (involving identical issue, has not advanced any reason as to why the above order of the Tribunal should not be followed. As such, we do not find any merits in the Revenue's appeals and by following the earlier decision, we reject the same. 3.10 In view thereof, it is evident that the manufacture of anodes without the stem is incomplete since it cannot be put to use in the electrolysis process for manufacture of aluminium. Hence, once 'Anode as a whole' is held to be an intermediate product, its parts such as 'Anode Stem' cannot be placed on a different footing for the purpose of denial of credit. 3.11 Reliance in this regard is placed on the ruling in the case of Hindustan Aluminium Corporation v. Commissioner 1995 (80) ELT 287 - Tri wherein i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e duty paid on the said capital goods would again have been taken as Modvat credit and utilised for paying duty on Aluminium. Thus, viewed from both the angles viz. payment of duty or captive consumption, the exercise is revenue neutral. 5.2 As such, there being no revenue implication and the entire exercise being revenue neutral, denial of credit is not justified. Reliance in this regard is placed on the ruling in the following cases: * Hindustan Lever Ltd. v. Commissioner 2010 (262) E.L.T. 1041 (Tri. - Mumbai) * Sacheta Metals v. Commissioner 2010 (262) E.L.T. 389 (Tri. - Ahmd.). 6. Without prejudice, extended period of limitation is not invokable. The entire demand is time barred and liable to be set aside. * The Appellant further submits that the entire demand is barred by limitation. * In this context, it is submitted that the departmental authorities were aware of the fact of manufacture of the aforesaid goods, the captive use thereof in the factory, manner of accounting etc. right from January, 1997, in as much as classification list was being filed by the Appellant since such date. Hence, the invocation of extended period of limitation is gross ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsumed. Captive consumption by itself shows that the product, which is captively consumed, is an intermediate. The Tribunal in the case of Raymond Ltd., Indian Aluminium Co. Ltd., Hindustan Fibres Ltd. and Others has expressed similar view. 10. Looking to above views and the well settled position about what is intermediate product and having regard to the fact that the appellants in their Form-I form (C/List) shows that bus-bar is captively consumed. We have no doubt in our mind that bus-bar is an intermediate product and is eligible to the benefit of credit of input itself in terms of Rule 57D(2) of C. Ex. Rules, 1944." 10. The Tribunal Calcutta in the case of TISCO Vs. CCE, Calcutta-II, has held as under:- "5. After considering the submissions made from both sides, I find that in the case of Flex Lamination (supra) relied upon by the leamed Advocate, Modvat was made available on the inputs used in the manufacture of Gravure Printing Cylinders which were further used in the manufacture of laminated plastic films by treating the same as intermediate products, though the same were exempted under Notification No. 67/95-C.E. It was held that in these circumstances, provisions o ..... 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