Excise duty exemption allowed on clinker for captive cement manufacturing under N/N. 67/95-CE and Sr No. 91 of N/N. 6/2006-CE

CESTAT Ahmedabad allowed the appeal regarding central excise duty on clinker used for captive consumption. The appellant claimed exemption under N/N. 67/95-CE for manufacturing cement cleared against international competitive bidding under Sr No. 91 of N/N. 6/2006-CE. The tribunal relied on precedents from SHREE DIGVIJAY CEMENT CO LTD and ULTRATECH CEMENTS LTD cases, holding that the appellant was entitled to the exemption. Since the issue was already settled by previous tribunal decisions, the impugned orders were set aside and the appeal was allowed.

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Issues Involved:
1. Demand of central excise duty on clinker used for captive consumption.
2. Applicability of exemption under Notification No. 67/95-CE dated 16.3.1995.
3. Manufacturing of cement cleared against International competitive bidding.
4. Claiming exemption under Sr No. 91 of Notification No. 6/2006-CE dated 01.03.2006.

Detailed Analysis:

1. Demand of Central Excise Duty on Clinker Used for Captive Consumption:
The primary issue in these appeals revolves around the demand for central excise duty on clinker, which is used for captive consumption in the manufacturing of cement. The appellant argued that this clinker is utilized in the production of cement, which is subsequently cleared against International competitive bidding, thereby qualifying for an exemption under Sr No. 91 of Notification No. 6/2006-CE dated 01.03.2006. The Tribunal has previously addressed this matter in similar cases, such as Shree Digvijay Cement Co Ltd, Thermo Cables Ltd, Kei Industries Ltd, Bharat Aluminium Co Ltd, and Ultratech Cements Ltd, where the appeals were allowed.

2. Applicability of Exemption under Notification No. 67/95-CE dated 16.3.1995:
The appellant contended that the exemption under Notification No. 67/95-CE dated 16.3.1995 is applicable to the clinker used captively in the manufacture of cement. This notification exempts certain inputs and capital goods used within the factory from excise duties. The Tribunal, in its previous decisions, has upheld that the exemption is valid even if the final product (cement) is cleared under an exemption, provided that the conditions specified in the notification and Rule 6 of the CENVAT Credit Rules, 2004, are met.

3. Manufacturing of Cement Cleared Against International Competitive Bidding:
The cement produced using the clinker was cleared against International competitive bidding, which qualifies for a nil rate of duty under Notification No. 6/2006-CE. The Tribunal confirmed that the appellant's supply of cement under this notification meets the criteria for exemption from excise duty on the clinker used in its production. This was supported by the Tribunal's decisions in similar cases, where it was established that the exemption applies to inputs used in the manufacture of final products cleared under international competitive bidding.

4. Claiming Exemption under Sr No. 91 of Notification No. 6/2006-CE dated 01.03.2006:
The appellant claimed exemption for the cement cleared under Sr No. 91 of Notification No. 6/2006-CE, which prescribes a nil rate of duty for goods supplied against international competitive bidding, provided they are exempt from basic customs duty and additional customs duty when imported into India. The Tribunal found that the appellant's final product (cement) satisfied these conditions, and thus, the exemption under Notification No. 67/95-CE for the clinker used in its manufacture was applicable.

Conclusion:
The Tribunal, after considering the submissions and reviewing the records, concluded that the issue is no longer res-integra, meaning it has been settled by previous decisions. The impugned orders demanding excise duty on the clinker were set aside, and the appeals were allowed with consequential relief. The Tribunal's consistent application of the exemption notifications and rules in similar cases reinforced the appellant's entitlement to the claimed exemptions.

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