2018 (2) TMI 206 - AT - Central Excise

Tribunal rules ownership not required for exemption benefits under Notification

The Tribunal ruled in favor of the appellant, holding that ownership of molasses was not a prerequisite for availing exemption benefits under Notification ... Benefit of N/N. 67/95-CE, dated 16.03.1995 - During the process of conversion of raw sugar into white sugar, molasses emerge - denial of benefit on the ground that captive consumption notification is not available to them inasmuch as, they are not the owners of molasses - Held that: - Notification No.67/95-CE, nowhere lays down the condition of ownership of the goods used captively. In the absence of the same in the notification, it is not permissible to the Revenue to introduce the said condition in the notification and to deny the benefit on the said ground. Extended period of limitation - Held that: - the demand having been raised, beyond the normal period of limitation is barred by limitation, inasmuch as, the Revenue has not been able to establish any suppression, mis-statement etc., on the part of the assessee, with a malafide intention to evade payment of duty. Appeal allowed - decided in favor of appellant. Issues:1. Applicability of Notification No.67/95-CE for captive consumption of molasses.2. Ownership of molasses and its impact on availing exemption benefits.3. Validity of demand raised beyond the normal period of limitation.Analysis:1. The case involved the appellant engaged in processing raw sugar into white sugar on a job work basis, leading to the emergence of molasses. The appellant claimed captive consumption benefit under Notification No.67/95-CE for converting molasses into spirit. However, the Revenue objected, citing lack of ownership of molasses and issued a show-cause notice for duty demand.2. The dispute centered on whether ownership of molasses was a prerequisite for availing the exemption notification. The Tribunal noted that the appellant's lack of ownership did not disqualify them from the benefit under Notification No.67/95-CE. The decision emphasized that ownership of inputs was not a determining factor for notification eligibility, citing precedents where ownership was deemed irrelevant for availing benefits.3. Additionally, the Tribunal found the demand raised beyond the normal limitation period to be unjustified, as there was no evidence of suppression or misstatement by the appellant to evade duty payment. Consequently, the impugned order confirming the duty demand, interest, and penalty was set aside, granting relief to the appellant.Overall, the judgment clarified that ownership of inputs was not a condition for availing exemption benefits under Notification No.67/95-CE and emphasized the importance of adhering to the limitation period for raising demands unless there is evidence of malafide intent on the part of the assessee.