2015 (3) TMI 376 - AT - Customs

Benefit of exemption from CVD in terms of Central Excise Notification No. 4/2005 (S.No.2) as well as Notification No. 6/2002 (S.No. 246) - Demand of differential duty - Held that - There is no dispute that prior to restructuring the Tariff, the goods were classifiable under sub-heading 1508.90 and the benefit of exemption was available to the applicant. After restructuring of the Tariff, the goods were classifiable under sub-heading 15171022. Both the sides admitted that the goods are classifiable under sub-heading 15171022, which indicates Sal fat (processed or refined) . On a plain reading of the wording of the notification, we find that the benefit of the exemption extended all goods except Margarine and other similar edible preparations. Prima facie, we find that the impugned goods are not margarine or other similar preparations. In view of that, we are of the prima facie view, the applicants are eligible for exemption notification. Hence, we waive the requirement of predeposit of duty and stay its recovery till the disposal of the appeals - Stay granted.

Issues Involved:
Classification under Customs Tariff Heading, Benefit of Central Excise Notification, Denial of Exemption, Differential Duty Demand, Restructuring of Tariff, Eligibility for Exemption Notification

Classification under Customs Tariff Heading:
The applicant filed Bill of Entry for clearance of goods declared as 'Bakery Shortening' under Customs Tariff Heading 15179010 and claimed the benefit of CVD under Central Excise Notifications. The adjudicating authority denied the benefit of exemption notification as it was found that the exemption did not extend to the specific sub-heading 15179010, leading to a demand for differential duty.

Benefit of Central Excise Notification:
The applicants claimed the benefit of exemption under Notification No. 6/2002 (S.No. 246), which covered all goods except Margarine and similar edible preparations. Despite the restructuring of the Tariff where the goods were now classified under sub-heading 15171022, the Tribunal found that the impugned goods were not Margarine or similar preparations. Therefore, the Tribunal held that the applicants were prima facie eligible for the exemption notification, waiving the requirement of predeposit of duty and staying its recovery until the disposal of the appeals.

Denial of Exemption and Differential Duty Demand:
The adjudicating authority had denied the benefit of exemption notification No. 4/2005 (S.No.2) and 6/2002 (S.No.246) to the applicants, resulting in a demand for differential duty amounting to specific sums. However, upon review, the Tribunal found that the applicants were eligible for exemption under the relevant notification, leading to the stay of duty recovery pending appeal disposal.

Restructuring of Tariff and Eligibility for Exemption Notification:
Prior to the Tariff restructuring, the goods were classifiable under a different sub-heading where the exemption was available. Post-restructuring, the goods fell under a new sub-heading. The Tribunal determined that the goods were not similar to Margarine or other exempted preparations, making the applicants eligible for the exemption under the notification. Therefore, the Tribunal allowed the stay applications and waived the predeposit of duty until the final disposal of the appeals.

This detailed analysis of the judgment from the Appellate Tribunal CESTAT CHENNAI highlights the issues of classification under Customs Tariff Heading, the benefit of Central Excise Notification, denial of exemption, differential duty demand, restructuring of the Tariff, and the eligibility for exemption notification. The Tribunal's decision to grant the applicants the benefit of exemption based on the specific classification of goods showcases a thorough review of the legal and factual aspects involved in the case.

← Previous Next →