2009 (8) TMI 936 - AT - Central Excise

Summary

Issues involved: The judgment involves two main issues: (1) whether the goods in question qualify as "handicraft" for the benefit of a specific notification, and (2) whether clubbing of clearances is necessary.

Issue 1 - Handicraft Qualification: The appellant argued that the goods, which were hand-made furniture with decorative and artistic features, should be considered handicraft. Reference was made to a Supreme Court case setting out criteria for defining handicraft. The Revenue, however, contended that the goods did not meet the criteria and should not be classified as handicraft based on an observation by the Adjudicating Authority.

Issue 2 - Clubbing of Clearances: The question of whether the clearances by two units of the Appellant should be clubbed was also considered.

The Apex Court's judgment clarified that for wooden furniture to be considered "handicrafts," it must be predominantly made by hand and have visual appeal with artistic features. The Court emphasized that mere hand-making of furniture does not automatically qualify it as handicraft; it must exhibit substantial artistic improvement. The Tribunal found that the goods in question were predominantly hand-made and provided evidence of artistic features in the manufacturing process, such as carving and inlay work done manually. The Tribunal concluded that the goods fell under the category of handicraft based on the criteria laid down by the Apex Court.

The Tribunal held that the goods manufactured by the Appellant qualified as handicraft and were entitled to the benefit of the specific notification, exempting them from duty without the need for clubbing of clearances. Consequently, the Appeals were allowed with any consequential relief granted as per the law.