BLUE STAR LTD. Vs. COMMISSIONER OF CENTRAL EXCISE
LAWS(CE)-2005-9-251
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
Decided on September 01,2005

Appellant
VERSUS
Respondents

JUDGEMENT

T. Anjaneyulu, Member (J) - (1.)HEARD both sides.
(2.)THE assessee is in appeal aggrieved by the Order -in -Appeal No. RJB/M -III/463/2003 dated 22.10.2003 passed by the Commissioner of Central Excise (Appeals), Mumbai -III.
(3.)THE assessee is engaged in the manufacture of various intermediary products such as air -cooled condensers, evaporators, panels, etc., which are used by them captively in the manufacture of air -conditioners. They claimed exemption from payment of duty on such captively consumed items under Notification No. 217/86 dated 02.04.1986 as amended. During the period 19.08.1991 to 27.01.1992, they cleared the Split Air -conditioners, wherein such intermediate products were used in 100% E.O.Us without payment of duty under Notification No. 123/81 dated 02.06.1981.
The contention of the Department is that since the finished goods, i.e. Split Air -conditioners were exempted from duty under Notification No. 123/81 - C.E., the appellants are not entitled to exemption from duty in respect of the intermediate products manufactured by them under Notification No. 217/86 - C.E. dated 02.04.1986. The provision under Notification No. 217/81 -C.E. as it stood at the relevant time and on which reliance is placed by the Department 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 leviable thereon or is chargeable to Nil rate of duty. The amendment made in the Notification by Notification No. 33/92 -C.E. dated 01.03.1992 is applicable prospectively and hence inputs used in final goods supplied to 100% EOU prior to 01.03.1992 are not eligible for exemption prior to that date. The amended provision reads as under - provided that nothing contained in this Notification shall apply to inputs used in or in relation to the manufacture of the final products (other than those cleared either to the unit in free trade zone or 10096 EOU), which are exempt from the whole of the duty of excise leviable thereon or is chargeable to Nil rate of duty.



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