2011 (2) TMI 401 - AT - Central Excise

Exemption - supply of aerated waters to vending machines - CBEC Circular No. 439/5/99-CX. dt. 8-2-99 - Sl. No. 15 of the Table to Notification No. 6/2002-C.E. dt. 1-3-2002 - Since as per the Sl. No. 15 assessees have no case for exemption for the goods supplied to the vending machines which is nothing but soft drink concentrate - The argument that what is supplied in canisters to the vending machines is in semi-finished form and is not capable of being marketed also cannot be accepted - benefit of exemption not available to assessee.

Summary

Issues:
Benefit of exemption from payment of duty in terms of Sl. No. 15 of the Table to Notification No. 6/2002-C.E. to aerated waters supplied to vending machines.

Analysis:
The appeals involved a common issue concerning the benefit of exemption from duty for aerated waters supplied to vending machines. The Tribunal heard both sides and examined Sl. No. 15 of the notification, which specifically covers "aerated waters prepared and dispensed by vending machines." The contention was that what is supplied in canisters to the vending machines is in a semi-finished form and not capable of being marketed. However, the Tribunal noted that the goods supplied were soft drink concentrate, not aerated water as per the clear language of Sl. No. 15. Additionally, it was highlighted that M/s. Pepsico, supplying similar semi-finished drinks for vending machines, paid excise duty under a different classification. Referring to a CBEC Circular, it was clarified that preparations for beverages for use in aerated water are correctly classified under a specific sub-heading.

The Tribunal concluded that the benefit under Sl. No. 15 of the notification was not applicable to the goods in question. Therefore, the impugned orders were upheld, and the appeals were rejected. The decision was pronounced in open court by the Vice-President, Ms. Jyoti Balasundaram.