2001 (4) TMI 923 - AT - Central Excise

Summary

Issues: Interpretation of Notification No. 5/98-CE regarding conditions for exemption.

Analysis:
1. The appellants manufactured Polycarbonate Bottles and sought benefits under Notification No. 5/98-CE. A show cause notice was issued alleging non-compliance with condition No. 10 of the notification, stating that modvat credit was utilized in manufacturing other products.

2. The Assistant Commissioner initially ruled in favor of the assessee, but the department challenged this decision before the Commissioner (Appeals), who interpreted the condition against the assessee, leading to the present appeal.

3. The appellants' advocate cited a Tribunal judgment in a similar case, N.M. Nagpal(P) Ltd. vs CCE, Delhi, which addressed the issues at hand. The judgment analyzed the exemption under Serial Number 69 of the notification, subject to conditions specified in Serial Number 10 of the Annexure.

4. The Tribunal's interpretation clarified that the manufacturer should not avail of credit of duty paid on any other product manufactured in the same factory, not on inputs used in relation to other products. The condition explicitly states "on any other product" and not "in respect of any other product," emphasizing the denial of credit on the final product itself.

5. As the appellants had not availed of duty credit on any other product manufactured in the same factory, the Tribunal allowed the appeal based on the interpretation provided in the cited case, granting consequential relief if applicable.

6. The judgment highlights the importance of precise interpretation of conditions for exemption under notifications, focusing on the specific language used to determine eligibility for benefits. The decision provides clarity on the scope of availing duty credit within the same factory for different products, emphasizing the need for strict adherence to the conditions outlined in the notifications to claim exemptions effectively.