Tribunal allows appeals, sets aside duty on intermediate products in manufacturing power cables

The appeals were allowed by the Tribunal, setting aside the Order-in-Originals concerning duty on intermediate products used in manufacturing power cables. The Tribunal held that the duty liability on intermediate products did not apply when final goods were cleared with duty payment. Relying on relevant provisions, the Tribunal concluded that the appellants, who cleared final products with duty payment, were entitled to the benefit of the notification for intermediate products used in manufacturing. Consequently, the impugned orders were set aside, and the appeals were allowed with consequential relief.

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Issues:
Appeals against Order-in-Originals for duty on intermediate products used in manufacturing power cables.

Analysis:
The appeals were filed against Order-in-Originals dated 31.08.2015, 30.11.2015, and 30.09.2016, concerning the duty on intermediate products used in the manufacture of power cables. The issue in all appeals was identical, so they were disposed of collectively for convenience, covering the period from February 2012 to February 2015. During this period, the appellants manufactured power cables and cleared them for Mega Power Projects under full exemption. The dispute arose when officers alleged duty liability on armoured cables and sheathed wire arising during manufacturing, as the finished goods were cleared without duty payment, invoking clandestine removal charges.

Upon hearing both parties and examining the case records, the Tribunal referred to a similar case involving KEI Industries Ltd. and others, where it was established that duty liability on intermediate products used in manufacturing final goods cleared with duty payment did not apply. Citing the provisions of Rule 6(6)(vii) of the CENVAT Credit Rules, 2004, and Notification No.67/95CE, the Tribunal concluded that the appellants, who cleared final products with duty payment, were entitled to the benefit of the notification for intermediate products used in manufacturing. Consequently, the impugned orders were set aside, and the appeals were allowed with consequential relief.

In light of the Tribunal's decision on similar facts, it was held that the appellants were entitled to the benefit of Notification No.67/1995 for intermediate products used in manufacturing final goods. Therefore, the impugned order was found to lack merit, leading to its setting aside and the allowance of the appeals filed by the appellants.

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