The Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) allowed the benefit of excise duty exemption on clinker manufactured and captively consumed.
During the course of audit, it was observed that the appellants had a balance of 3380.29MT of cement on the day of declaration which contained 2954.40 MT of clinker; this quantity of cement was cleared without payment of duty and the fact of clearance of dutiable and non-dutiable goods were not disclosed to the Department and therefore, the appellant was liable to pay Central Excise Duty of Rs.11,41,126.
Accordingly, a show-cause notice dated 26.03.2013 was issued to the appellants. It also appeared that as the appellants have switched over to the exemption Notification No.50/2003 and therefore, exemption under Notification No.67/1995 is not applicable to the clinker manufactured and captively consumed by them; another show-cause noticed dated 14.03.2013 seeking to recover Central Excise Duty of Rs.3,12,55,061/- was issued to the appellants.
The Counsel for the appellant submitted that in view of the proviso (vi) to Notification No. 67/1995, the exemption under Notification No.50/2003 would continue to be available on clinker where final products are cleared after discharging the obligation prescribed in Rule 6 of CENVAT Credit Rules, 2004. He further submits that the issue has been finally settled in favour of the appellants by the Apex Court in the case of Ambuja Cement& Others in which the appellant was also a party with CA No.16934/2014.
A Two-Member Bench comprising SS Garg, Judicial Member and P Anjani Kumar, Technical Member observed that “We are of the considered opinion that the issue is no longer res integra having been settled by the Apex Court. We find that there is no infirmity in the availment of Notification No.67/1995 on clinker manufactured and captively consumed, while availing Notification No.50/2003 on the cement manufactured by the appellants. In view of the same, the impugned order cannot be sustained and therefore, set aside. The appeal is allowed.”
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