Captive Consumption Exemption: Ownership of inputs is not required where the notification imposes no such condition.

Notification No. 67/95-CE was held applicable to goods captively consumed for further manufacture, and ownership of the molasses used in job work was not a prescribed condition for the exemption. The denial of captive consumption benefit solely because the assessee was not the owner of the molasses was therefore unsustainable. On limitation, a demand raised beyond the normal period could not be sustained because the Revenue did not establish suppression, misstatement, or mala fide intent to evade duty, so the extended period was inapplicable. The impugned order was consequently found unsustainable on both merits and limitation.

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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; (ii) whether the demand 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 exempts goods captively consumed for further manufacture and does not prescribe ownership of the inputs or intermediate goods as a condition for availing the exemption. Ownership of the molasses was held to be irrelevant to the admissibility of the benefit. The denial of exemption merely because the molasses emerged during job work for the principal manufacturer was therefore unsustainable.

Conclusion: The assessee was entitled to the benefit of the captive consumption exemption, and denial of the notification benefit on the ground of lack of ownership was not justified.

Issue (ii): whether the demand was barred by limitation.

Analysis: The demand was raised beyond the normal period, and the Revenue failed to establish suppression, misstatement, or any mala fide intent to evade duty. In the absence of such ingredients, invocation of the extended period was not permissible.

Conclusion: The demand was time-barred and the extended period of limitation was inapplicable.

Final Conclusion: The impugned order was unsustainable on merits as well as on limitation, and the assessee was entitled to consequential relief.

Ratio Decidendi: Ownership of captively used inputs or intermediates is not a prerequisite for exemption where the notification does not impose such a condition, and the extended period of limitation cannot be invoked without proof of suppression or misstatement with intent to evade duty.

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