2011 (10) TMI 68 - AT - Central Excise

Manufacture of brass sheets/circles - Clandestine removal of goods - confiscation of goods - exemption under Notification No.5/98 dt.2.6.98 at Sr.No.207. - Held that - the notification is very clear and the notification under consideration is predecessor of notification considered by Hon ble Supreme Court and the words used are similar. The decision of Hon ble Supreme Court in the case of CCE Jaipur Vs Mewar Bartan Nirman Udyog 2008 (2008 -TMI - 30906 - SUPREME COURT) is squarely applicable to the facts of this case. Therefore the goods manufactured by the appellant are totally exempt from payment of duty. Since the goods are totally exempt from payment question of taking registration accounting the goods manufactured does not arise. - Decided in favor of assessee.

Summary

Issues:
Eligibility of brass sheets/circles for exemption under Notification No.5/98.

Analysis:
The case involved a dispute regarding the eligibility of brass sheets/circles for exemption under Notification No.5/98. The Central Excise officers conducted a search at the factory premises of the appellants and found discrepancies in the stock of finished goods and raw materials. Subsequently, a Show Cause Notice was issued to the appellants for manufacturing and clearing brass sheets/circles without paying Central Excise duty. The proceedings resulted in the confirmation of duty demand, confiscation of seized goods, and imposition of penalties. The appellants contended that the brass sheets/circles manufactured by them were eligible for exemption under the said notification. The Commissioner (Appeals) had held that since copper was the predominant metal in the brass sheets/circles, they were classifiable under 'copper sheets/circles' and hence, liable to duty payment.

Upon considering the submissions, the Tribunal referred to the Supreme Court decision in the case of CCE Jaipur Vs Mewar Bartan Nirman Udyog, emphasizing that exemption notifications must be strictly interpreted based on their language. The Tribunal noted that the exemption notification at Sr.No.207 of Notification No.5/1998 provided exemption to goods other than trimmed or untrimmed sheets or circles of copper, subject to certain conditions. The Tribunal observed that the appellants fulfilled the relevant condition, and the crucial issue was whether the brass sheets/circles were eligible for exemption. Citing the Supreme Court's stance on interpreting exemption notifications, the Tribunal concluded that the goods manufactured by the appellants fell under the exemption category as per the notification. The Tribunal highlighted that the language of the notification was clear, and since the goods were exempt from duty payment, the question of registration and maintaining accounts did not arise.

In light of the above analysis, the Tribunal set aside the impugned order and allowed the appeals, providing consequential relief to the appellant. The decision was based on the strict interpretation of the exemption notification and the classification of the goods manufactured by the appellants under the relevant provisions.