2006 (10) TMI 344 - AT - Central Excise

Summary

Issues:
Eligibility of exemption under Notification 5/98 dated 2-6-1998 for precipitated silicon or aluminium silicate compound.

Analysis:
The dispute in this case revolves around the eligibility of exemption under Notification 5/98 dated 2-6-1998 for the product manufactured by the appellants, which is identified as precipitated silicon or aluminium silicate, an inorganic compound of Silicon. The product has been classified under Chapter 2811.90 and accepted as such by the original authority and the Commissioner (Appeals).

Upon examination, it is noted that Notification 5/98 provides exemption to "Silicon in all forms" under Chapter 28. However, the product in question is not pure Silicon but a compound of Silicon. Pure Silicon falls under Chapter 2804.40, while its compounds are separately listed under Chapter 2811. Consequently, the exemption intended for Silicon specifically cannot be extended to Silicon compounds due to the distinct classification.

Referring to a prior decision of the Tribunal in Collector of Central Excise, Rajkot v. Madhu Chemicals, Bhavnagar, it is clarified that the concession granted for silicon under the residuary tariff item 68 under the previous tariff regime cannot be applied in the current scenario. This is because the current classification system distinctly separates Silicon in all forms and its compounds under Chapter 28, precluding the extension of concessions meant for pure Silicon to Silicon compounds.

Ultimately, the appeal of the party is dismissed concerning the exemption claimed for the silicon compounds under Notification 5/98. Notably, since the matter primarily involves interpretation without any deliberate violation, the imposition of a penalty is deemed unwarranted. Consequently, the penalty initially imposed is set aside, and the appeal is disposed of accordingly.

This judgment, delivered on 27-10-2006 by Member (T) M. Veeraiyan, conclusively addresses the issue of exemption eligibility for the precipitated silicon or aluminium silicate compound under Notification 5/98, emphasizing the crucial distinction between pure Silicon and its compounds within the customs classification framework.