2005 (2) TMI 611 - AT - Central Excise

Summary

Issues Involved:
Classification of final products under Tariff Heading 5806.39, Benefit of Notification No. 67/95-C.E. denied, Claim for exemption under Notification No. 22/96-C.E., Interpretation of Notification No. 22/96-C.E., Confirmation of duty and penalty imposition.

Classification of Final Products:
The appellants filed appeals against the denial of the benefit of Notification No. 67/95-C.E. due to the final products being classified under Tariff Heading 5806.39. The contention was not about the classification but about the denial of the benefit under the said notification. The lower authorities confirmed the classification under 5806.39, which was accepted by the appellants.

Benefit of Notification No. 67/95-C.E. Denied:
The denial of the benefit under Notification No. 67/95-C.E. was based on the final products falling under Tariff Heading 5806.39, which was not covered by the provisions of the notification. This led to the imposition of duty on the yarn used in manufacturing goods under 5806.39 of the Tariff.

Claim for Exemption under Notification No. 22/96-C.E.:
The appellants claimed exemption under Notification No. 22/96-C.E., which provides exemption for goods captively consumed in the manufacture of certain fabrics falling under specific sub-headings of the Central Excise Tariff Act. The appellants argued that their goods fell under Tariff Heading 5806.39, which was exempted for payment of duty under this notification.

Interpretation of Notification No. 22/96-C.E.:
Notification No. 22/96-C.E. exempts goods captively consumed in the manufacture of specific fabrics falling under designated sub-headings of the Tariff Act. As the goods manufactured by the appellants were found to fall under sub-heading 5806.39, which was covered by the notification, the duty confirmation and penalty imposition were set aside, and the appeals were allowed.

Confirmation of Duty and Penalty Imposition:
The impugned order confirming the duty and imposing a penalty was set aside as the appellants were entitled to the benefit of exemption under Notification No. 22/96-C.E. The judgment allowed the appeals, granting the appellants consequential relief as per the law.