2016 (11) TMI 10 - AT - Central Excise

Classification of AC couplings - whether to be classified as pipes - benefit of exemption notification no.6/06-CE - Held that - Hon ble Supreme Court in the case of Bharat Forge & Press Industries (P) Ltd. 1990 1990 (1) TMI 70 - SUPREME COURT OF INDIA has observed that the distinction made in the above circular is not tenable, both in law as well as in facts. It is submitted that the couplings are nothing but shorter version of pipes, which are classified in the same Tariff Headings of 6811.83 - the essentiality certificate has been produced from the competent authority and the impugned goods were cleared for the intended purposes. There is no separate billing or clearance document for the couplings - Decided against the revenue.

Summary

Issues:
Eligibility for exemption under notification no.6/06-CE in respect of AC couplings cleared along with AC pressure pipes.

Analysis:
The Revenue appealed against the order of the Commissioner (Appeals-I), Indore regarding the eligibility of the respondent for exemption under notification no.6/06-CE for AC couplings cleared with AC pressure pipes. The dispute revolved around whether the exemption applied to the couplings as well. The Revenue argued that the exemption should only cover pipes, not couplings. The Original Authority upheld the demand of excise duty, imposed penalties, and denied the exemption. On appeal, the Commissioner (Appeals) overturned the original order, leading to the Revenue's appeal before the tribunal.

The Revenue contended that a clarification by the Board limited the exemption to pipes and excluded pipe fittings. However, the respondent's counsel cited a Supreme Court decision and argued that couplings were akin to shorter pipes, falling under the same Tariff Headings. The first Appellate Authority analyzed the Supreme Court decision and the Board's clarification, concluding that the couplings were covered under the same heading as pipes, making them eligible for exemption. The Authority emphasized that the Board's clarification did not have the force of law and could not negate the exemption granted by the Government based on public interest.

The tribunal found the Revenue's interpretation of the notification entry too literal and contrary to its intended scope. The respondent had produced a certificate from the prescribed authority, and the goods were cleared for their intended purposes without separate documentation for the couplings. Considering the overall exemption scope and the reasoning of the lower authority, the tribunal upheld the Commissioner (Appeals) decision, rejecting the Revenue's appeal.

In conclusion, the tribunal dismissed the Revenue's appeal, affirming the eligibility of the respondent for exemption under notification no.6/06-CE for AC couplings cleared with AC pressure pipes.