2007 (8) TMI 550 - AT - Central Excise

Summary

Issues involved: Challenge to order of Commissioner (Appeals) upholding recovery of excise duty, penalty, and interest; interpretation of CBEC letter regarding remission of duty on pet bottles.

Summary:

Challenge to Order of Commissioner (Appeals): The appellant contested the order of the Commissioner (Appeals) which upheld the recovery of excise duty amounting to Rs. 77.853/-, imposition of penalty of a similar amount, and the direction to pay interest. The appellant sought a waiver of pre-deposit for the duty and penalty amounts through an application.

Interpretation of CBEC Letter on Remission of Duty: The authorities below concluded that the appellant wrongly availed the benefit of duty exemption for broken or damaged pet bottles of aerated water based on a CBEC letter dated 17-9-1975, originally intended for glass bottles only. However, upon scrutiny of the letter, it was found that the term "breakages of bottles" was not limited to glass bottles but encompassed all types of bottles, including plastic ones like pet bottles. The definition of "bottle" from the Concise Oxford Dictionary supported this interpretation, defining it as a container for storing liquid, typically made of glass or plastic. The term "break" in the context of the letter meant to shatter or spread into pieces, which could apply to pet bottles as well. Therefore, the appellant successfully argued that the CBEC letter was applicable to all types of bottles capable of storing liquid, even if pet bottles were not prevalent at the time of the letter's issuance. Consequently, the appellant's request for a waiver of pre-deposit for the duty and penalty was granted, and the recovery of duty and penalty was stayed pending the appeal hearing.

This judgment highlights the importance of a thorough interpretation of legal documents and the application of relevant definitions to determine the scope of benefits or exemptions available to parties in legal proceedings.