TaxTMI 
TaxTMI 
2026 (7) TMI 1446
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....28 of the Central Excise Tariff Act 1985. During the relevant period, the appellant procured Sulphur on payment of duty and availed Cenvat Credit of duty paid on inputs and service tax paid on input services such as GTA, handling and other eligible services. 4. Apart from normal clearances on payment of central excise duty, the appellant also cleared Sulphuric Acid to fertilizer manufacturers without payment of duty under Notification No. 12/2012-CE dated 17.03.2012 by following the procedure prescribed under the Central Excise (removal of goods at concessional rate of duty for manufacture of excisable goods) Rules, 2001. 5. The Department entertained the view that such clearance constituted clearance of "exempted goods" within the meaning of Rule 2(d) of the Cenvat Credit Rules, 2004 and that since the appellant had neither maintained separate accounts under Rule 6(2) nor exercised the option prescribed under Rule 6(3A), the appellant was liable to pay an amount under Rule 6(3). 6. Accordingly, Show Cause Notices dated 31.05.2017 and 02.11.2018 were issued demanding Rs. 5,02,570/- and Rs. 5,43,876/- respectively together with interest and penalty. 7. After considering ....
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....ing judgment of the Hon'ble Rajasthan High Court in the case of Hindustan Zinc Ltd., supra, affirmed by the Hon'ble Supreme Court, wherein, it has been held that goods cleared under Chapter X, procedure cannot be treated as exempted goods merely because duty is not paid at the stage of clearance. It is also contended that the notification merely grants remission of duty subject to fulfilment of statutory conditions and does not render the goods exempt. 16. Learned Counsel further submits that the Commissioner (Appeals) failed to appreciate CBEC Circular No. F.No. 354/66/2001-TRU explaining the legal scheme under the 2001 Rules. 17. It is finally argued that even otherwise the issue is purely interpretational and, therefore, extended period and consequential penalties are wholly unsustainable. 18. Learned Authorized Representative reiterates the reasoning contained in the impugned order. It is submitted that the Rule 2(d) of the CCR defines exempted goods to include goods chargeable to nil rate of duty since SA was admittedly cleared without payment of duty under Notification No. 12/2012CE, such goods clearly fall within the definition of exempted goods. 19. It is argued....
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....edit. It is also not disputed that Sulphuric Acid has been manufactured in the appellant's factory and that part of the production was cleared on payment of Central Excise duty while another part was supplied to fertilizer manufacturers under Notification No. 12/2012-CE after following the statutory procedure prescribed under Rules of 2001. Thus, the controversy is purely one of interpretation of Rule 6 of the CCR, 2004. 24. The principal reasoning adopted by the Commissioner (Appeals) is that Sulphuric Acid cleared under Notification No. 12/2012-CE attracts "Nil" rate of duty and therefore falls within Rule 2(d) defining exempted goods. In our considered opinion, such reasoning is legally unsustainable. Rule 2(d) cannot be interpreted in isolation. The Notification itself has to be read harmoniously with Central Excise Act, the Cenvat Credit Rules and the Central Excise (removal of goods at concessional rate of duty for manufacture of excisable goods) Rules, 2001. 25. A careful reading of Notification No. 12/2012-CE shows that the exemption is not unconditional. The exemption is available only when the recipient manufacturer complies with the elaborate statutory procedure pr....
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.... The Notification is the same. The manufacturing process is identical. The legal issues are identical. In each of those Final Orders, the Tribunal has consistently held that Rule 6 has no application. Judicial consistency is one of the fundamental principles governing administration of justice. Unless an earlier decision is distinguished on facts or over ruled by a superior forum, a Co-ordinate Bench is expected to follow the same. No distinguishing feature has been pointed out by the Revenue. On the contrary, the Revenue itself admits that the facts are identical. Therefore, judicial discipline requires us to follow the earlier decisions in the appellant's own case. 29. The Revenue has argued that Final Order No. A/30179/2025 dated 16.05.2025 has been challenged before the Hon'ble High Court of Andhra Pradesh and notice has been issued. We are unable to accept the said contention. It is well settled that mere filing of an appeal does not wipe out or suspend the operation of the judgment appealed against. Unless the superior Court grants a stay or specifically suspends the operation of the judgment, the decision continues to remain binding between the parties as well as upon the....
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....3. Sulphuric Acid manufactured by the appellant is admittedly a dutiable excisable product. The appellant clears substantial quantities on payment of duty and only specified clearances are permitted without payment of duty to fertilizer manufacturers, subject to statutory conditions prescribed under the Rules of 2001. Such clearances cannot be equated with manufacture of inherently exempted goods. The obligation to ensure proper utilization of the goods continues throughout the statutory chain. If the recipient fails to satisfy the prescribed conditions, the duty becomes recoverable in accordance with the law. Thus, the exemption is conditional, purpose - specific and procedural. It does not alter the intrinsic dutiable character of the goods. Consequently, the mechanical application of Rule 6 adopted by the Commissioner (Appeals) overlooks the Legislative Scheme governing such removals. 34. Another second circumstance is that this Tribunal has constantly decided the identical issues in favour of the appellant for earlier as well as subsequent period. The Final Orders dated 26.09.2016, 22.12.2016, 17.04.2015 and 16.05.2025 all relates to the appellant's own manufacturing activit....