2016 (11) TMI 310 - AT - Central Excise

Notification No.10/2003 dated 01.02.2003 - Held that - In the case of Comtrust Super Designer Tiles (P) Limited 2009 (5) TMI 415 - CESTAT BANGALORE - Absence of evidence purchase of stone chips by assessee was immaterial. Impugned order were in commercial sense mosaic tiles entitled to benefit of Notification No. 10/2003-C.E. even though they were used for external application - Appeal allowed

Summary

Issues:
- Eligibility for exemption under Notification No. 10/2003 for mosaic tiles.
- Consideration of expert opinion and commercial understanding of the product.
- Uniformity in classification and invocation of the longer period for duty demand.

Eligibility for Exemption under Notification No. 10/2003 for Mosaic Tiles:
The case involved the appellants manufacturing various tiles and claiming duty exemption under Notification No. 10/2003. The dispute arose when Central Excise officers objected to the exemption, arguing that the tiles were not commercially known as mosaic tiles. The lower authorities denied the exemption, leading to an appeal. The Tribunal considered the issue of eligibility, referencing a previous case where a similar matter was decided in favor of the assessee. The Tribunal analyzed the evidence, including reports and statements, to determine whether the tiles qualified as mosaic tiles for the purpose of the exemption. The Tribunal highlighted the importance of the presence of chips, commercial understanding, and the unique trade name in classifying the tiles as mosaic tiles. Expert opinion and commercial usage were crucial factors in establishing the eligibility for the exemption.

Consideration of Expert Opinion and Commercial Understanding:
The Tribunal examined the expert opinion provided by an architect, which supported the classification of the appellants' tiles as mosaic tiles. The architect's report emphasized the presence of chips in the tiles, aligning with the characteristics of mosaic tiles. Additionally, the Tribunal considered the commercial understanding of the product, noting that different manufacturers may use varied descriptions for similar products. The Tribunal referred to past cases where similar products were classified as mosaic tiles, emphasizing the generic nature of the term and the need for uniformity in classification. The Tribunal concluded that, based on expert opinion, commercial usage, and past precedents, the appellants' tiles qualified as mosaic tiles for the purpose of duty exemption.

Uniformity in Classification and Invocation of Longer Period:
The Tribunal addressed the importance of uniformity in classification across different Commissionerates, highlighting the need for consistent application of exemption criteria. Moreover, the Tribunal critiqued the invocation of the longer period for duty demand, stating that the demand was time-barred due to the appellants' compliance with registration and notification requirements during the relevant period. The Tribunal emphasized the lack of justification for invoking the longer period and ultimately decided to drop the demand. In conclusion, the Tribunal set aside the impugned order and allowed the appeal, emphasizing the significance of expert opinions, commercial understanding, and uniform classification in determining eligibility for duty exemption under Notification No. 10/2003.