Nil excise duty on brass goods used for utensils and handicrafts defeats captive-consumption exemption dispute.

Brass sheets and circles used in making utensils and handicrafts were treated as brass goods under Heading 7409 attracting nil Central Excise duty. On that basis, captive-consumption relief under Notification No. 67/1995 did not arise because the final use itself was nil-rated. The CESTAT noted the controlling Supreme Court ruling and held that the goods were not exigible to duty, so the Revenue's challenge to the exemption claim failed.

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Issues: Whether untrimmed brass sheets and circles used in the manufacture of utensils and handicrafts were chargeable to Central Excise duty and whether Notification No. 67/1995 dated 16.03.1995 could be invoked for captive consumption.

Analysis: The goods in question were brass products falling under Heading 7409 and were being used in the manufacture of utensils and handicrafts. The controlling Supreme Court ruling held that brass goods so used attract nil rate of duty. Once the final use attracted nil duty, the question of denial of exemption on the footing of captive consumption under Notification No. 67/1995 did not arise.

Conclusion: The untrimmed brass sheets and circles were not exigible to Central Excise duty, and the Revenue's challenge to the exemption claim failed.

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