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2019-VIL-91-CESTAT-HYD-CE

CENTRAL EXCISE CESTAT Cases

Central Excise - whether the fly ash used in the manufacture of Flex-O-Board should also be reckoned or only the fly ash used in the manufacture of Aerocon panels should be considered for determining the eligibility of exemption Notification No. 06/2002-CE dated 01.03.2002 and Notification No. 05/2006 dated 01.03.2006 - It is the case of the Revenue that the fly ash used in the manufacture of Aerocon sheets only can be considered – HELD - a plain reading of the exemption notification shows that of the various materials used in the manufacture of final products 25% must be fly ash. It does not indicate this 25% will also include any fly ash that might have been used in the course of manufacture of the inputs by the suppliers of the assessee. It also does not indicate, on the other hand, that the fly ash must be used in the manufacture of final products itself - Therefore, two views are possible in interpreting this notification are that the 25% of fly ash must be used in the manufacture of final products without any reference to the composition of other inputs and the 25% includes any fly ash which may have been used in the manufacture of the inputs themselves. The Department took the first view and the assessee argues the second. This is a matter of doubt and the benefit of doubt must go in favour of the Revenue and against the assessee. Hence on merits, the assessee is not entitled to the notification - the extended period of limitation cannot be invoked, therefore, the demand of duty and interest within the normal period only can be confirmed - the penalty imposed under Section 11AC is set aside – the appeal is partly allowed

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