Captive clinker exemption denied where cement unit already enjoyed area-based exemption under the prevailing notification.

Clinker captively consumed in the manufacture of cement was held ineligible for exemption under Notification No. 67/95-CE where the cement unit was already availing area-based exemption under Notification No. 50/03-CE. The governing principle applied was that captive clinker used for exempt cement production does not qualify for the captive-consumption exemption, and the clinker was treated as falling within the negative list of the area-based exemption scheme. On those facts, the exemption claim failed.

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Issues: Whether clinker captively consumed in the manufacture of cement was eligible for exemption under Notification No. 67/95-CE when the cement unit was already availing area-based exemption under Notification No. 50/03-CE.

Analysis: The parties accepted that the issue had already been decided against the assessee in a prior Tribunal decision. The governing principle applied was that where the cement unit enjoys area-based exemption under Notification No. 50/03-CE, clinker used captively for manufacture of cement does not qualify for exemption under Notification No. 67/95-CE. The clinker was also treated as falling within the negative list of the area-based exemption scheme.

Conclusion: Clinker captively consumed for manufacture of cement was not eligible for exemption under Notification No. 67/95-CE in the facts of the case.

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