Captive-consumption exemption remains available for inputs used in exempt final products; demand, interest and penalty fail.

Captive-consumption exemption under Notification No. 67/95 was held available for inputs used in manufacturing final products cleared under Notification No. 6/2006-CE. The Tribunal noted that the dispute was covered by an earlier decision on identical facts and followed that precedent. On that basis, the demand premised on denial of the exemption could not be sustained, and the associated interest and penalty also failed.

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Issues: Whether exemption under Notification No. 67/95 was available for inputs captively consumed when the final products were cleared under Notification No. 6/2006-CE.

Analysis: The dispute turned on the availability of the captive-consumption exemption when the final products were exempt from central excise duty. The Tribunal noted that the issue was covered by an earlier decision on identical facts. Following that precedent, it held that the demand raised on the premise that the exemption was unavailable could not be sustained.

Conclusion: The assessee was entitled to the exemption under Notification No. 67/95, and the demand, interest, and penalty could not be sustained.

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