2005 (5) TMI 431 - AT - Central Excise

Summary

Issues:
1. Interpretation of Notification No. 5/99, dated 28-2-99 regarding exemption eligibility for 'fryums' under sub-heading 2108.99.
2. Determination of whether 'fryums' can be classified as 'namkeens' or 'papads' for exemption purposes.

Issue 1:
The case involved an appeal against O-I-A No. 19/2002-C.E. dated 31-1-2002, focusing on the eligibility of 'fryums' for exemption under Notification No. 5/99. The Revenue argued that 'fryums' did not fall under any items specified in the notification. The Commissioner initially denied the exemption, stating that 'fryums' did not qualify as per the notification. However, the Tribunal found that the manufacturing process of 'fryums' aligned with that of 'papads' falling under the exempt category of the notification, ultimately allowing the appeal.

Issue 2:
The key contention revolved around whether 'fryums' could be equated with 'namkeens' or 'papads' for exemption purposes. The Revenue claimed that 'fryums' were marketed as namkeens, not papads, and thus were ineligible for exemption. However, the Tribunal analyzed the manufacturing process of 'fryums' and determined that they were akin to 'papads,' falling within the description of items eligible for exemption under the notification. The Tribunal also referenced a previous order related to the same assessee, further supporting the classification of 'fryums' as namkeens/papads, thus upholding the Commissioner's decision.

In summary, the Appellate Tribunal CESTAT, Bangalore, in the cited judgment, addressed issues related to the interpretation of Notification No. 5/99 for exemption eligibility of 'fryums' under sub-heading 2108.99. The Tribunal concluded that 'fryums' could be considered as 'namkeens' or 'papads' as per the notification's description, aligning with the manufacturing process and market positioning of the product. The judgment upheld the Commissioner's decision, allowing the appeal and granting the benefit of exemption to the appellants.