2016 (4) TMI 1107 - AT - Central Excise

Exemption from duty claimed - footwear made exclusively of plastic material in terms of notification no. 18/2001-CE dated 26.04.2001 - exemption available to footwear made exclusively of plastic materials was sought to be denied to the appellant on the ground that certain non-plastic materials like fabric, PVC sole are used in the shoes made by the appellant - Held that - Explanation-I inserted vide notification no.30/2001-CE was merely to remove doubts to the effect that if materials other than of plastic like buckles, tabs, eyelet stays or in-soles are used, the footwear still shall be deemed to be made exclusively of plastic materials. This scope of terms exclusively of plastic materials was further explained in the Board s Circular dated 30.05.2001. The Board clarified that the expression footwear made of plastic materials should be given its normal meaning. It was also clarified that explanation inserted is applicable for the past clearances also. We find that in these sets of facts, the denial of exemption to the appellant is not sustainable. There is no allegation that the footwear made by the appellants were not of plastic materials. The question is only on exclusive use of plastic material only. Keeping in view the clarificatory Explanation-I and Board s Clarification dated 30.05.2001, we find the footwear made by the appellant being essentially of plastic material, and giving the normal meaning of plastic footwear, the exemption is rightly available to the appellant. - Decided in favour of assessee.

Summary

Issues:
Exemption from central excise duty on footwear made exclusively of plastic material under notification no. 18/2001-CE.

Analysis:
The appellant, engaged in manufacturing footwear, claimed exemption from duty under notification no. 18/2001-CE. The Original Authority denied the exemption, leading to an appeal before the Commissioner (Appeals) who upheld the decision. The appellant challenged this denial before the Appellate Tribunal CESTAT NEW DELHI.

The appellant argued that their footwear, though containing PVC soles and PVC coated fabric uppers, should be considered exclusively made of plastic material. They relied on Explanation-I added to the notification, which clarified that even if certain parts were not plastic, the footwear could still be deemed as made exclusively of plastic material.

The Department contended that the appellant's shoes contained more non-plastic material than allowed under the explanation, making them ineligible for the exemption. The Tribunal examined the records and the arguments presented by both sides.

The Tribunal noted that the purpose of Explanation-I was to clarify that the presence of non-plastic materials like buckles or tabs did not disqualify footwear from being considered exclusively made of plastic. They referred to a Board's Circular to interpret the term "footwear made of plastic materials" in its normal sense.

Ultimately, the Tribunal found that the footwear made by the appellant, primarily of plastic material, qualified for the exemption. They emphasized that the critical factor was the exclusive use of plastic material, which was satisfied in this case. Relying on the clarification provided in the Explanation-I and the Board's Circular, the Tribunal allowed the appeal and overturned the previous decision denying the exemption.

In conclusion, the Tribunal ruled in favor of the appellant, granting them the exemption from central excise duty on the footwear made predominantly of plastic material, as per the provisions of notification no. 18/2001-CE.