Captive consumption exemption cannot be denied for lack of ownership, and extended limitation fails without suppression.

Notification No. 67/95-CE could not be denied for captive consumption merely because the assessee was not the owner of the molasses used in further manufacture, since the exemption imposed no ownership condition. The limitation issue was also resolved in favour of the assessee: the extended period was unavailable because the record did not establish suppression, misstatement, or intent to evade duty. On that basis, the demand for the relevant period was held time-barred and the impugned order was set aside with consequential relief.

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Issues: (i) Whether the benefit of Notification No. 67/95-CE dated 16.03.1995 could be denied on the ground that the assessee was not the owner of the molasses used captively for further manufacture; and (ii) whether the demand raised for the relevant period was barred by limitation.

Issue (i): Whether the benefit of Notification No. 67/95-CE dated 16.03.1995 could be denied on the ground that the assessee was not the owner of the molasses used captively for further manufacture.

Analysis: The notification grants exemption to products captively consumed for further manufacture and does not prescribe ownership of the goods as a condition for availing the benefit. The reasoning that the molasses belonged to the principal manufacturer, and therefore the exemption was unavailable, was held to be unsustainable. Ownership of inputs was treated as irrelevant where the notification itself contained no such requirement.

Conclusion: The benefit of the captive consumption exemption could not be denied merely because the assessee was not the owner of the molasses.

Issue (ii): Whether the demand raised for the relevant period was barred by limitation.

Analysis: The demand had been invoked beyond the normal period, and the record did not establish suppression, misstatement, or any other conduct showing a mala fide intent to evade duty. In the absence of such ingredients, the extended period of limitation was unavailable.

Conclusion: The demand was barred by limitation.

Final Conclusion: The impugned order was set aside and the appeal succeeded with consequential relief according to law.

Ratio Decidendi: Where an exemption notification for captive consumption does not require ownership of the inputs, the benefit cannot be denied by importing such a condition, and the extended limitation period cannot be applied absent suppression, misstatement, or intent to evade duty.

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