2004 (7) TMI 399 - AT - Central Excise

Summary

Issues:
Interpretation of Notification 15/2001 for transitional duty rates on clearances of corrugated boxes from 1st March 2001 to 31st March 2001.

Detailed Analysis:

1. Background and Legal Framework:
The appellants, manufacturers of corrugated boxes, appealed against the Commissioner (Appeals), Mumbai's order upholding the demand of Rs. 5,25,111/- and a penalty of Rs. 50,000. The issue revolved around the duty liability on clearances of corrugated boxes from 1st March 2001 to 31st March 2001, as per Notification 15/2001.

2. Applicability of Small Scale Exemption:
The appellants manufactured corrugated boxes, which were exempt from duty until 1-3-2001 and became excisable from that date. They opted for small scale exemption under Notification 6/2001, allowing duty exemption for clearances up to Rs. 100 lakhs in a financial year starting from 1st April. The duty liability for clearances from 1-3-2001 to 31-3-2001 was in question.

3. Dispute Over Duty Payment Period:
The appellants cleared goods worth Rs. 53,26,936/- from 1st March 2001 to 31st March 2001. The dispute arose regarding the duty rate applicable during this period. The Department contended that duty should be paid on clearances from 1-3-2001, while the appellants argued for duty payment only from 16-3-2001 based on Notification 15/2001.

4. Judicial Analysis and Decision:
The Tribunal rejected the appellants' contention, emphasizing that duty became payable on corrugated boxes from 1-3-2001. Notification 15/2001, issued on 16-3-2001, provided a transitional arrangement for duty rates in March 2001. The Tribunal held that the notification applied to clearances from 1-3-2001 to 31-3-2001, allowing for duty exemption up to Rs. 10 lakhs and full duty thereafter. The Commissioner's decision was upheld, confirming the duty liability as per the transitional arrangement.

5. Conclusion:
The Tribunal found no error in the Commissioner's order, rejecting the appeal and upholding the duty liability on clearances of corrugated boxes from 1st March 2001 to 31st March 2001 as per Notification 15/2001. The judgment clarified the duty payment timeline and the application of transitional duty rates, ensuring compliance with the legal framework governing excisable goods and duty exemptions.