2020 (1) TMI 1455 - AT - Central Excise

Exemption from Excise Duty - Benefit of N/N. 6/2002-CE dated 01.03.2002 (Sl. no. 158) and N/N. 5/2006-CE dated 01.03.2006 (Sl. no. 9) - manufacture of Puzzolana Asbestos Cement Pressure Pipes - denial of benefit on the ground that assessee has not followed the BIS specifications and that they have not maintained the record prescribed by the Department - HELD THAT - There is no reason to disallow the duty exemption inasmuch the appellant assessee has duly maintained the records which shows that minimum prescribed quantity of fly ash has been used in the manufacture of final product which fact has not been disputed by the Ld. Commissioner. Since, no separate records format has been prescribed by the jurisdictional Commissionerate, there is no reason to deny the exemption. The contention made by the Ld. Commissioner for the period in dispute (2003-04 to 2007-08) that BIS standards have not been complied, is completely mis-conceived inasmuch as no such condition has been prescribed in the subject exemption notifications. Appeal allowed - decided in favor of appellant.

Summary

Issues involved: Central Excise duty demand confirmation, Exemption under Notification no. 6/2002-CE and Notification No.5/2006-CE, Compliance with BIS specifications, Maintenance of proper accounts, Interpretation of exemption notification, Prescribed form or manner for availing exemption benefits.

Analysis:

The case involves an appeal by M/s. Neelanchal Natural Resource Pvt Ltd. against the Central Excise duty demand confirmed by the Ld. Commissioner for the period 2003-04 to 2007-08. The appellant is engaged in the manufacture of Puzzolana Asbestos Cement Pressure Pipes and has availed full exemption under Notification no. 6/2002-CE and partial exemption under Notification No.5/2006-CE. The dispute arises from the Department's disallowance of the exemption benefit, alleging non-compliance with BIS specifications and failure to maintain prescribed records.

For the subsequent period 2008-09, the Ld. Commissioner (Appeals) set aside the demand, stating that compliance with BIS specifications is not a legal requirement for availing the exemption under the notifications. The appellant argued that no such condition was prescribed in the notifications for the disputed period. Citing a Supreme Court decision, the appellant contended that interpretation of exemption notifications depends on the terminology used therein. The appellant also highlighted that no form or manner was prescribed by the jurisdictional Commissioner for availing the exemption benefits.

The appellant presented records and certificates to demonstrate the usage of the minimum prescribed quantity of fly ash in the manufacturing process. Referring to a Tribunal decision, the appellant emphasized that the absence of a prescribed form or manner for providing information should not result in denial of the exemption. The Tribunal's decision in the referenced case supported the appellant's argument that the information supplied was sufficient for claiming the exemption.

The Tribunal found that the appellant had maintained records showing the use of the minimum prescribed quantity of fly ash, which was not disputed by the Ld. Commissioner. Since no specific record format was prescribed by the jurisdictional Commissionerate, the Tribunal concluded that there was no justification for denying the exemption. The contention regarding non-compliance with BIS standards was deemed misconceived as no such condition was mentioned in the exemption notifications for the relevant period.

Ultimately, the Tribunal allowed the appeal filed by the appellant assessee, providing consequential relief as per the law. The decision emphasized the importance of maintaining records of compliance with exemption conditions and highlighted the necessity of clear and unambiguous terms in exemption notifications for proper interpretation and application.