1998 (2) TMI 536 - AT - Central Excise

Summary

Issues involved: Interpretation of exemption notifications under Central Excise law.

In the present case, two appeals were filed by the Revenue challenging a common order-in-appeal passed by the Collector of Central Excise (Appeals), New Delhi. The appeals involved the classification of goods manufactured by M/s. Singh Plastic and M/s. Thermopack Industries under Chapter Heading Nos. 39.23, 39.24, and 39.26 of the Tariff, and the applicability of duty exemptions under Notification No. 53/88-C.E., dated 1-3-88.

Analysis:
1. The respondents had paid duty under Sl. No. 40 of the exemption notification and claimed Modvat credit for inputs used in manufacturing the goods. The Revenue argued that the goods fell under Sl. No. 39 of the Table and duty should have been paid accordingly.

2. Upon review, it was found that the exemption under Sl. No. 39 was conditional, and if conditions were not met, duty was to be assessed under Sl. No. 40. The Tribunal noted that the assessees had the option to choose the applicable exemption notification when two were equally relevant. In this case, since Sl. Nos. 39 and 40 differed in wording, the assessees were within their rights to pay duty and not claim full exemption subject to conditions.

3. The Collector of Central Excise (Appeals) had correctly determined that the benefit of Sl. No. 40 could not be denied to the manufacturers based on the circumstances of the case. The Tribunal upheld this view and found no fault in the Collector's decision. Consequently, both appeals by the Revenue were dismissed, and the decision of the Collector of Central Excise (Appeals) was affirmed.

This judgment clarifies the principles of interpreting exemption notifications and upholds the right of manufacturers to choose the applicable duty exemption when multiple options are available under the law.