Eligibility of Notification No.067/95 or Exemption of Intermidiate Goods Used for Supply of Goods under Notification No.12/2012 Against ICB

[Chetan Pawar]

Dear All,

We are supplying of Goods which was exempted under against ICB . For this supply is their any duty liabilities comes for intermediate goods used for the Exempted Goods or are we eligible for exemption under notification no.067/1995.

Thanks & Regards,

Chetan Pawar

[Rajagopalan Ranganathan]

Sir,

The first proviso to Notification No. 67/95-CE dated 16.3.95 states that "Provided that nothing contained in this notification shall apply to inputs used in or in relation to the manufacture of final products which are exempt from the whole of the duty of excise or additional duty of excise leviable thereon or are chargeable to nil rate of duty. Therefore since your final product cleared is exempted you have to pay duty on the intermediate product.

[Chetan Pawar]

Sir,

We are using finish Goods in other FG as intermediate not a input. Which FG we are using, the same is Exempted and which we have prepared is also exempted. so in that case duty liabilities is come or not?

[SHAHID HASHMI]

Sir,

Please go through the Tribunal decision in the Case of M/s. Thermo Cables Ltd. Vs CCE, 2013 (292) ELT 412 = 2012 (12) TMI 942 - CESTAT BANGALORE and M/s. Bharat Aluminium Ltd. Vs CCE, 2014 – VIL – 72 – CESTAT – DEL – CE. on similar issue.

[Arti Gupta]

Proviso of Notification No. 67/1995 is not applicable where the goods are cleared by a manufacturer of dutiable and exempted final products, after discharging the obligation prescribed in Rule 6 of the CENVAT Credit Rules. Further, as per Rule 6(6)(vii) of CCR, Rule 6(1) to (4) is not applicable if the goods are supplied to ICB project. Accordingly manufacturer may take cenvat credit of Excise duty paid on inputs used for goods cleared against ICB projects.

Hence, Excise duty Exemption under Notification No. 67/1995 shall be available on intermediate goods used for exempted Final goods supplied against ICB project.

AI Summary

Exemption eligibility: intermediate goods for ICB supplies may qualify if CENVAT Rule 6 compliance is satisfied.
The proviso to Notification No. 67/1995 excludes inputs used in manufacture of wholly exempt final products, which would prima facie make intermediate goods chargeable to duty; however, where a manufacturer clears both dutiable and exempt products and complies with Rule 6 of the CENVAT Credit Rules, and where Rule 6(6)(vii) applies to supplies against ICB projects, the manufacturer may take CENVAT credit on inputs and intermediate goods and claim exemption under the notification for intermediate goods used in exempt final goods supplied to ICB projects.