2003 (3) TMI 379 - AT - Central Excise

Summary

Issues:
1. Classification of cigarette filter rods under Notification No. 1/93 before and after restructuring of the tariff.
2. Retrospective application of Notification 93/95 to grant benefits from the date of restructuring.
3. Interpretation of taxing provisions and the benefit of Notification 1/93.
4. Effect of the Finance Bill, 1995, on the restructuring of the Central Excise Tariff Act.

Analysis:
1. The case involved the classification of cigarette filter rods under Notification No. 1/93 both before and after the restructuring of the tariff sub-heading 5601.00. The dispute arose when the restructuring resulted in the classification of the product under sub-heading 5601.22, which was not initially covered by the notification. However, an amendment to Notification 1/93 by Notification 93/95 extended the benefit to all goods falling under sub-heading 5601, including cigarette filter rods.

2. The Commissioner (Appeals) considered the retrospective application of Notification 93/95 to grant benefits from the date of restructuring. Relying on precedents and the decision in the case of Apex Steel (P) Ltd., it was held that the amendment was clarificatory in nature and had a retrospective effect. The Commissioner emphasized that the restructuring did not exclude cigarette filter rods from the ambit of Notification 1/93, and therefore, the benefit should apply even after the restructuring.

3. The Revenue raised concerns regarding the interpretation of taxing provisions and the benefit of Notification 1/93. They argued that the restructuring placed the product under a different sub-heading, making it ineligible for the exemption during a specific period. However, the Tribunal highlighted the principle that beneficial provisions of statutes should not be unduly restricted, citing Supreme Court decisions to support the continuation of benefits under the notification.

4. The judgment also addressed the impact of the Finance Bill, 1995, on the restructuring of the Central Excise Tariff Act. It was noted that the restructuring of Heading 5601.00 into 6-digit headings was accompanied by an amendment to include all goods falling under Heading 5601 through Notification 93/95. The Tribunal emphasized the legal principle that proposed changes in tariff entries do not become operative immediately, as clarified in the case law of Pieco Electronics & Electrical Ltd. v. CCE, Pune. Therefore, the benefit of Notification 1/93 continued until the effective date of the amendments.

In conclusion, the Tribunal found the Revenue's appeal lacking merit and dismissed it based on the comprehensive analysis of the classification, retrospective application of notifications, interpretation of taxing provisions, and the legal impact of the Finance Bill, 1995, on the restructuring of the Central Excise Tariff Act.