2014 (7) TMI 985 - AT - Central Excise

Benefit of Exemption notification to the product Playing Cards - Notification No.02/2011-CE - Rate of duty 5% (now 6%) - playing cards are Sports goods or not - Held that - The plain interpretation of said notification would indicate that the appellant is eligible to avail the said benefit of notification if his product falls under Chapter 95. In the case in hand, there is no dispute that the appellant s product Playing Cards is classifiable under Chapter 95 and more specifically under Chapter sub-heading No.95.04. The issue of the benefit of exemption claimed under notification in respect of playing cards as sports goods has been settled by the Tribunal in Esbee Playing Card Co (1996 (12) TMI 147 - CEGAT, NEW DELHI) - benefit of exemption allowed - Decided in favor of assessee.

Summary

Issues:
1. Eligibility of manufacturer of playing cards for exemption under Notification No.02/2011-CE.
2. Interpretation of 'sports goods' under the Central Excise Tariff Act, 1985.

Detailed Analysis:
Issue 1:
The judgment addresses the eligibility of a manufacturer of playing cards for exemption under Notification No.02/2011-CE. The manufacturer claimed the benefit of payment of duty at 5% under the said notification. However, during an audit, it was contended that playing cards did not qualify as sports goods under the notification. A show cause notice was issued, leading to confirmation of demand by the adjudicating authority. The appellant contested, arguing that playing cards should be considered sports goods eligible for exemption. The Tribunal examined the notification and concluded that since playing cards fell under Chapter 95, the benefit of the notification could not be denied to the appellant.

Issue 2:
The interpretation of 'sports goods' under the Central Excise Tariff Act was a key aspect of the judgment. The adjudicating authority relied on various definitions to determine that playing cards did not qualify as sports goods. However, the Tribunal analyzed the notification and relevant provisions to establish that the plain interpretation of the notification indicated that products falling under Chapter 95, including playing cards, were eligible for exemption. The Tribunal referred to past decisions, including Esbee Playing Card Co, where it was held that playing cards could be classified as sports goods. This decision was deemed precedent-setting, overriding other conflicting judgments.

The judgment emphasized the broad scope of the term 'sports goods' and highlighted that playing cards could be considered under this category. The Tribunal's decision favored the appellant, setting aside the impugned order and allowing the appeals. The judgment clarified the eligibility of playing cards for exemption under the notification and established a precedent based on past rulings.