1983 (12) TMI 298 - AT - Central Excise

Summary

Issues:
Assessment under Tariff Item 33C of the Central Excise Tariff for Hot Cups and Stainless Steel Rectangular Beverage Jugs. Interpretation of Explanation I to Tariff Item 33C. Applicability of Notification No. 33/69-C.E., dated 1-3-1969. Confiscation and penalty under Rule 173Q of the Central Excise Rules, 1944.

Analysis:
The appeal involved the assessment under Tariff Item 33C of the Central Excise Tariff for Hot Cups and Stainless Steel Rectangular Beverage Jugs. The Deputy Collector of Central Excise had ordered that these items should be assessed under T.I. 33 and subjected to Central Excise Duty under Notification No. 33/69-C.E., dated 1-3-1969. The Appellate Collector upheld this order and imposed confiscation, fine, and penalty under Rule 173Q of the Central Excise Rules, 1944. The appellants challenged this decision before the Tribunal. The issue was whether these items fell under the specified tariff items and notification for duty imposition.

The Advocate for the appellants argued that the items could not be classified as 'Domestic Electrical Appliances' under T.I. 33C. She contended that the items did not fit the description of 'Kettles or Food warming cabinets' under the notification. The argument was supported by citing relevant legal authorities emphasizing the importance of trade and popular meaning in tax interpretation. The contention was that the items should not be subjected to Central Excise duty and the penalties should be remitted.

The Departmental Representative argued that Explanation I broadened the scope of 'Domestic Electrical Appliances' to include similar appliances used in various settings. He asserted that the items in question were essentially 'Kettles and food warming cabinets' even if used in specific contexts like aircraft. The representative distinguished a legal case to emphasize the importance of the article's use in the present case.

After considering the arguments, the Tribunal found that Explanation I expanded the definition of 'Domestic Electrical Appliances' to cover items used in diverse environments. However, regarding the specific duty liability under the notification, the Tribunal agreed with the appellants. It was noted that the lower authorities failed to provide evidence or reasoning to support the classification of Hot Cups and Beverage Jugs under the notification. Additionally, a Tariff Advice and subsequent amendment to the notification were referenced to support the appellants' position. The Tribunal concluded that the items in question were distinct from Electric Kettles and Food Warming Cabinets, overturning the lower authorities' decision and directing a refund of duty, fine, and penalty to the appellants.

In conclusion, the Tribunal allowed the appeal, ruling in favor of the appellants by setting aside the lower authorities' orders and ordering the refund of duty, fine, and penalty.