2008 (9) TMI 33 - SC - Central Excise

Assessee claims exemption under S.No.200 of Not. 3/2001 exemption denied on the ground that trimmed or untrimmed circles of brass cannot fall under S.No.200 but they fall under S.No.201 where rate of duty is ₹ 3500 PMT as per entries given in notification, items made from copper attract duty @ of ₹ 3500 PMT whereas circles made from brass attract nil rate of duty revenue appeal dismissed - While interpreting the exemption notification, one cannot go by rules of interpretation

Summary

Issues:
1. Interpretation of exemption Notification No.3/2001-CE, dated 1.3.2001 regarding the entitlement to claim benefit of exemption under S.No.200.
2. Determination of whether trimmed or untrimmed circles of brass fall under S.No.200 or S.No.201 of the Notification.
3. Analysis of the dichotomy created between trimmed/untrimmed sheets of copper and all goods other than trimmed/untrimmed circles of copper under Chapter Heading 74.09 in the exemption Notification.

Issue 1: Interpretation of Exemption Notification:
The primary issue in this case was the interpretation of exemption Notification No.3/2001-CE, dated 1.3.2001, specifically regarding the entitlement of the respondent-assessee to claim the benefit of exemption under S.No.200. The dispute revolved around whether the goods in question fell under S.No.200, attracting a nil rate of duty, or under S.No.201, where the duty rate was Rs.3500 PMT.

Issue 2: Classification of Trimmed or Untrimmed Circles of Brass:
Another key issue was the classification of trimmed or untrimmed circles of brass manufactured by the assessee. The Department argued that brass, being an alloy of copper/zinc, should be classified under S.No.201 of the Notification, thereby subjecting the assessee to duty at the rate of Rs.3500 PMT. The contention was whether circles made from brass should be considered under S.No.200 or S.No.201.

Issue 3: Dichotomy in the Exemption Notification:
The judgment delved into the dichotomy created within the exemption Notification concerning goods falling under Chapter Heading 74.09. While both S.No.200 and S.No.201 pertained to Chapter Heading 74.09, a clear distinction was made between trimmed/untrimmed sheets of copper and all goods other than trimmed/untrimmed circles of copper intended for use in the manufacture of utensils. The analysis focused on interpreting this dichotomy to determine the applicability of the nil rate of duty under S.No.200.

The Supreme Court analyzed the relevant provisions of the Notification and emphasized the need for strict interpretation of exemption Notifications based on their language. It was highlighted that the exemption Notification specifically differentiated between goods made from copper and those made from brass, with different duty rates applicable. The Court clarified that since the circles in question were manufactured from brass, falling under Chapter Heading 74.09, they should be considered under S.No.200, entitling the assessee to claim the nil rate of duty.

In conclusion, the Court found no infirmity in the Tribunal's decision and dismissed the Civil Appeal filed by the Department, with no order as to costs. Additionally, other related appeals were also dismissed in light of the judgment passed in the main Civil Appeal.