2012 (12) TMI 942

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....ed penalties are also under challenge in the two appeals. The impugned demands are on copper wire manufactured by the assessee and captively consumed in the manufacture of insulated cables (power cables) within their factory during the respective periods. The insulated (power) cables were cleared without payment of duty under Notification No.6/2006 CE dt. 01/03/2006. Therefore, according to the Revenue, the assessee was not entitled to claim the benefit of Notification No.67/95 CE dt. 16/03/1995 in respect of their intermediate product (copper wire) and consequently they ought to have paid appropriate duty on copper wire. This view made its way into show-cause notices wherein demands of duty on copper wire were raised on the assessee and pe....

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....y chapter) supplied against international competitive bidding. This exemption was subject to the condition that the goods were exempted from basic customs duty and additional duty of customs when imported into India. It is not in dispute that the final products cleared by the assessee without payment of duty during the relevant period satisfied this condition. Against this backdrop, one has to read the provisions of Rule 6(6)(vii) of the CENVAT Credit Rules 2004. This sub-rule reads as follows:- (6) The provisions of sub-rules (1), (2), (3) and (4) shall not be applicable in case the excisable goods removed without payment of duty are either (i) (ii) (iii) (iv) (v) (vi) (vii) all goods which are exempt from the dutie....

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.... annexed to the Notification. Admittedly, copper wire is one of the inputs and the power cables manufactured and cleared by the assessee are final products covered by the Notification. However, the Department would like to deny the benefit of this Notification to copper wire manufactured by the assessee and captively consumed in their factory for the manufacture of insulated (power) cables. According to the Revenue, the assessee's claim is hit by the proviso to the Notification, which reads as under: 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....