Exemption- Admissibility to intermediate goods used in the manufacture of Cables supplied under ICB to Mega Power Project

[SHAHID HASHMI]

ISSUE: Notification No.67/95-CE dated 16/03/1995 provides duty exemption captively consumed inputs in the manufacture dutiable final products. Exception to this Notification is that this duty exemption is not applicable, if the final products are exempted from duty payment or attract nil rate of duty. An exception to this exception is when clearance of final products is made to a

1. to a unit in a Free Trade Zone, or
2. to a hundred percent Export Oriented Undertaking or
3. to a unit in an Electronic Hardware Technology Park, or
4. to a unit in a Software Technology Park, or
5. under notification No. 108/95-Central Excise Dated the 28^th August, 1995, or
6. by a manufacturer of dutiable and Exempted final products, after discharging the obligation prescribed in Rule 6 of the Cenvat Credit Rules, 2001'

Thus, when final products are supplied by a manufacturer of dutiable and Exempted final products, after discharging the obligation prescribed in Rule 6 of the Cenvat Credit Rules, 2001 etc. intermediate products continue to be exempted. Now, Rule 6 of the CENVAT Credit Rules, 2001 does not exist and existing have been Notified as Rule 6 of the CENVAT Credit Rules, 2004. The issue is whether the benefit of exemption to the intermediate product is available when final products are supplied to Mega Power Project under ICB after discharging obligation prescribed in Rule 6 (6)(vi) of the Cenvat Credit Rules, 2004.

[JSW CEMENTLIMITED]

The exemption is definitely available, if the said intermediate products are included in the list of goods required for the project and certified by concerned authorities.

AI Summary

Exemption for intermediate goods continues where final products are supplied to a project under ICB after Cenvat compliance. Exemption for intermediate goods continues where final products are supplied to a Mega Power Project under ICB after the manufacturer has discharged the qualifying Cenvat obligations; the exemption is available only if the intermediate goods are included in the project's required goods list and certified by the concerned authorities.