Custom, Excise & Service Tax Tribunal
Krcd India Pvt Ltd vs Mumbai Iv on 6 October, 2016
4IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
APPEAL NO: E/663/2006
[Arising out of Order-in-Appeal No: BR/183/M-IV/2005 dated 30/10/2005passed by the Commissioner of Central Excise (Appeals), Mumbai IV.]
For approval and signature:
Honble Shri Ramesh Nair, Member (Judicial)
Honble Shri C J Mathew, Member (Technical)
1.
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
:
No
2.
Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
:
3.
Whether Their Lordships wish to see the fair copy of the Order?
:
Seen
4.
Whether Order is to be circulated to the Departmental authorities?
:
Yes
KRCD India Pvt Ltd
Appellant
Vs
Commissioner of Central Excise
Mumbai IV
Respondent
Appearance:
Shri Rajesh Ostwal, Advocate for the appellant Shri Ashuthosh Nath, Asstt. Commissioner (AR) for the respondent CORAM:
Honble Shri Ramesh Nair, Member (Judicial) Honble Shri C J Mathew, Member (Technical) Date of hearing: 06/10/2016 Date of decision: 01/12/2016 ORDER NO: ____________________________ Per: Ramesh Nair The fact of the case is that the appellant is engaged in the manufacture of duplication of CDs. At the same time they are also manufacturing stampers which is captively consumed in the manufacture of CDs which are exempt from Central Excise duty. The appellant claimed exemption Notification No. 67/1995-CE dated 16/03/1995 in respect of stampers which are manufactured and consumed captively for manufacture of CDs. Revenue denied exemption on the ground that since the CDs are exempt from payment of duty, exemption on the intermediate product captively consumed is not admissible as per exemption Notification No. 67/1995-CE.
2. The contention of the Revenue is that stampers which are used captively is not a capital goods but it is an input. Therefore, exemption notification is not eligible. The appellant aggrieved by the decision of the Asstt. Commissioner in order dated 09/05/2005 filed an appeal before the Commissioner (Appeals) who agreeing with the views of the lower authority rejected the appeal and the decision of the lower authority was upheld.
3. Shri Rajesh Ostwal, learned counsel for the appellant submits that the stampers are specifically classified under Chapter 8524 9930. Therefore, it is qualified as capital goods. He submits that the stampers are used for manufacture but it is not consumed in the final product as the same is not contained in the final product, but used during the process of manufacture of CDs. Therefore, as per the definition of capital goods stamper is a capital goods and not an inputs. If this is so, it is clearly covered under the exemption Notification No. 67/95-CE for captive use, even though the final product is exempt from payment of duty. He placed reliance on the decision of the Tribunal in Raymond Ltd v. Commissioner of Central Excise 2015 (326) ELT 741 (Tri-Mumbai) and Hero Cycles Ltd v. Commissioner of Central Excise 2004 (165) ELT 540.
4. Shri Ashuthosh Nath, learned Asstt. Commissioner (AR) appearing on behalf of Revenue submits that the stampers manufactured by the appellant are captively consumed in the manufacture of CDs. These stampers are nothing but inputs only as per the use of the stampers. Therefore, primarily it falls under the definition of input. Inputs are not exempt under Notification No. 65/95-CE when it is used for exempted goods. In support of his contention he placed reliance on the judgments:
a) Shayona Pulp Conversion Mills P. Ltd v. Commissioner of Central Excise 2014 (308) ELT 144 (Tri.-Mumbai)
b) Force Motors Ltd. v. Commissioner of Central Excise 2008 (228) ELT 576 (Tri-Mumbai)
c) Aurobindo Pharma Ltd v. Commissioner of Central Excise 2006 (205) ELT 199 (Tri.-Bang.)
d) Kunnath Textiles v. Commissioner of Central Excise 2008 (229) ELT 628 (Tri.-Bang.)
5. We have carefully considered the submissions made by both the sides. We find that the stampers manufactured and used captively is falling under Chapter 85. As per the use of the stampers, we observe that the stampers are not getting consumed in the CDs though it is used for manufacture of CDs. Therefore, in our view the stampers falling under Chapter 85 qualifies as capital goods. The capital goods are exempted under Notification No. 67/95-CE dated 16/03/1995 even if it is used in the manufacture of exempted final products. We find that the case of the appellant is squarely covered by the judgment cited by the learned counsel, in the case of Raymond Ltd (supra) wherein this Tribunal has observed as under:
The appellants are manufacturing man-made fabrics and availing exemption under Notification No. 30/2004-C.E., dated 9-7-2004. They are also manufacturing dobby cards and using the same within their factory for manufacturing of goods. On the dobby cards, they are availing exemption under Notification No. 67/95-C.E., dated 16-3-1995. Notification No. 67/95 exempts capital goods and inputs from whole of Central Excise duty, if the same are captively consumed within the factory of production. In respect of the input(s), the notification prescribes certain additional conditions for claiming the benefit. The additional conditions being - that the said inputs are not used in manufacture of exempted final products.
2.?The Order-in-Original while analyzing that the said dobby cards are accessories of weaving machine (capital goods), denies the benefit of Notification No. 67/95-C.E. on the grounds that the final product manufactured by them is fully exempted.
3.?The appellant has cited the decision of this Tribunal in the case of Hero Cycles Ltd. - 2004 (165) E.L.T. 540 specifically on this issue. In the said ruling, the following has been held :-
3.?It is clearly established that the Tools and Dies, are covered in the category of capital goods as mentioned in Notification No. 67/95-C.E., dated 16-3-1995. The notification refers to capital goods as defined in Rule 57Q. The said rule refers to goods covered by Heading Nos. 82.02 to 82.11. Obviously therefore, being covered by Heading No. 82.07, Tools and Dies are capital goods, also for the purpose of Notification No. 67/95-C.E. The appellants have correctly pleaded that the ineligibility to duty exemption on the grounds of use of captively manufactured goods in the manufacture of fully exempt final products, applies only to inputs. Since the Tools and Dies are capital goods, no such disqualification is prescribed for capital goods. In other words, despite the use of captively manufactured Tools and Dies for manufacture of fully exempt final products, the duty concession is available. They have also relied on the decision of the Tribunal in the case of Siemens Ltd. v. Commissioner of Central Excise, Mumbai-VI - 2004 (176) E.L.T. 299 (T). In this order also, similar findings have been arrived at.
4.?Learned AR relies on the impugned order and states that the dobby cards are in fact inputs and not capital goods and therefore, the conditions specified in Notification No. 67/95 are applicable.
5.?We have considered the rival submissions. We observe that the said dobby cards are accessories of weaving machine. Weaving machine being capital goods under the Cenvat Credit Rules and accessories of weaving machine also become capital goods in terms of definition of capital goods given under the Cenvat Credit Rules. In view of the above, we find that the aforesaid decisions of the Tribunal are applicable. Accordingly, we allow the appeal, with consequential benefit(s), if any. The impugned order is set aside. In the case of Hero Cycles Ltd. cite supra a coordinate bench of this Tribunal has held as under:
3.?It is clearly established that the Tools and Dies, are covered in the category of capital goods as mentioned in Notification No. 67/95-C.E., dated 16-3-1995. The notification refers to capital goods as defined in Rule 57Q. The said rule refers to goods covered by Heading Nos. 82.02 to 82.11. Obviously therefore being covered by Heading No. 82.07, Tools and Dies are capital goods, also for the purpose of Notification No. 67/95-C.E. The appellants have correctly pleaded that the ineligibility to duty exemption on the grounds of use of captively manufactured goods in the manufacture of fully exempt final products, applies only to inputs. Since the Tools and Dies are capital goods, no such disqualification is prescribed for capital goods. In other words, despite the use of captively manufactured Tools and Dies for manufacture of fully exempt final products, the duty concession is available.
6. From the facts of the case as discussed above and taking support of both the above referred decisions, we find that the stampers used for manufacture of CDs are capital goods falling under Chapter 85. Therefore, it is exempted under Notification 67/95-CE dated 16/03/1995.
7. The impugned order is set aside and the appeal is allowed.
(Pronounced in Court on 01/12/2016) (C J Mathew) Member (Technical) (Ramesh Nair) Member (Judicial) */as 8 2