2003 (4) TMI 447 - AT - Central Excise

Demand - Samples used in test - Exemption, conditions of - Interpretation of statutes - Remission of duty - Samples used up in test

Summary

Issues:
- Whether duty is demandable on belts drawn as samples exceeding three meters in length for technical test.
- Whether the assessee is eligible for duty remission under the second proviso to Rule 49 of the Central Excise Rules, 1944.

Analysis:

Issue 1: Duty Demandable on Belts for Technical Test:
The appeals filed by the Revenue were against Orders-in-Appeal allowing the appeals filed by the assessee with consequential relief. The dispute revolved around whether duty is demandable on belts drawn as samples exceeding three meters in length for technical test. The Revenue contended that since the assessee exceeded the stipulated length for technical test samples, duty was payable. The Tribunal emphasized strict interpretation of the Notification No. 184/72, which specified the conditions for duty exemption for samples. The Tribunal held that when the fixed length drawn for testing exceeded the limit laid down in the Notification, the assessee could not claim exemption. The Tribunal concluded that the Assistant Commissioner was correct in demanding duty for the portion of belts exceeding three meters in length, as per the exact wording of the Notification.

Issue 2: Eligibility for Duty Remission:
Regarding the eligibility for duty remission under the second proviso to Rule 49 of the Central Excise Rules, 1944, the assessee argued that belts put to test were not marketable due to destructive testing. However, the Tribunal noted the lack of evidence supporting this claim. The Tribunal highlighted that the V-belts emerged as fully finished products before testing and were commercially known as such. The Tribunal rejected the argument that the assessee was entitled to duty remission under Rule 49, emphasizing that the situation did not align with the conditions for remission. The Tribunal disagreed with the Commissioner's view and held that the assessee was not eligible for duty remission. Citing a judgment of the Hon'ble Supreme Court, the Tribunal set aside the orders allowing the appeals filed by the Revenue and disposed of the cross-objections accordingly.

In conclusion, the Tribunal upheld the duty demand on belts exceeding three meters for technical testing and ruled against the eligibility of the assessee for duty remission under the second proviso to Rule 49. The judgment emphasized strict adherence to the conditions specified in the relevant Notification and clarified the criteria for duty exemption and remission in such cases.