2026 (3) TMI 1062 - AT - Central Excise

Exemption for captively consumed inputs available where Rule 6 compliance prevents fixed-percentage reversal under Cenvat rules.

Exemption for inputs captively consumed in manufacture is available where the assessee meets the conditions of Notification No.67/1995-CE and has complied ... Scope of exemption under Notification No.67/1995-CE for captively consumed inputs - Application of Rule 6 of Cenvat Credit Rules, 2004 and clause (vii) - binding effect of tribunal's own precedents. Whether the appellants were entitled to exemption under Notification No.67/1995-CE for relays cleared for captive consumption in manufacture of control panels where Rule 6 obligations were complied with and clause (vii) applied - HELD THAT:- The Tribunal held that the issue was covered by earlier decisions in the appellant's own cases [2025 (12) TMI 554 - CESTAT CHENNAI] and by other precedent, which found that where the assessee complied with the provisions of Rule 6 of the Cenvat Credit Rules, 2004 and fell within clause (vii), the obligation to reverse credit or to make payment on a fixed percentage did not apply to the clearances in question. The Tribunal recorded that lower authorities' conclusions were self-contradictory when they admitted in original orders that Rule 6 was not applicable but still confirmed demands. The Revenue did not show that the cited tribunal decisions had been overruled. Applying those precedents, the Tribunal concluded the demands were not legally sustainable and followed judicial discipline to apply its prior consistent view. [Paras 4, 5, 6, 8, 9] The demands were unsustainable; the impugned orders were set aside and the appeals allowed with consequential reliefs. Final Conclusion: The Tribunal applied its earlier decisions in the appellant's own cases, held that compliance with Rule 6 and applicability of clause (vii) entitled the appellant to exemption under Notification No.67/1995-CE, set aside the impugned orders and allowed the appeals with consequential reliefs. Issues: Whether relays captively consumed in the manufacture of control panels are eligible for exemption under Notification No.67/1995-CE dated 16.03.1995 where the assessee has complied with Rule 6 of the Cenvat Credit Rules, 2004.Analysis: The issue concerns interpretation of Notification No.67/1995-CE in conjunction with Rule 6 of the Cenvat Credit Rules, 2004 and the availability of the exclusion under clause (vii) where the assessee complied with the obligations under Rule 6. The Tribunal followed earlier final decisions in the appellant's own cases and allied precedents addressing identical facts and legal questions, which held that where the conditions of the notification are met and Rule 6 obligations are complied with, the fixed-percentage reversal under Rule 6 does not apply and the exemption under Notification No.67/1995-CE is available. The Department did not demonstrate that those earlier Tribunal orders have been reversed or distinguished by a higher forum.Conclusion: The impugned orders confirming demand are set aside and the appeals are allowed; the exemption under Notification No.67/1995-CE applies in favour of the assessee where Rule 6 of the Cenvat Credit Rules, 2004 has been complied with.Ratio Decidendi: Where an assessee satisfies the conditions of Notification No.67/1995-CE and complies with Rule 6 of the Cenvat Credit Rules, 2004, the exemption for captively consumed inputs is available and demands based on application of Rule 6 fixed-percentage reversal cannot be sustained.