2017 (3) TMI 1133 - AT - Central Excise

Benefit of N/N. 6/2006-CE dated 01.03.2006 - denial on the ground that manufacturing/replicating of CD ROM were not of Educational nature - Held that - The Revenue has presumed that no-educational nature means Video Games and consequently held that they are not covered by the N/N. 06/2006-CE dated 01.03.2006 - In the absence of any evidence on record that non-educational CD-ROMs containing journal, periodicals (magazines) or news paper are CD-ROMs of Video Games , the benefit of doubt goes to the assessee - benefit of notification allowed - demand set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
Interpretation of Notification No. 6/2006-CE dated 01.03.2006 regarding exemption of duty on CD-ROMs, determination of educational vs. non-educational nature of CD-ROM contents, absence of sample testing during investigation, imposition of duty, interest, and penalty on the assessee.

Analysis:
The case involved a dispute over the applicability of Notification No. 6/2006-CE dated 01.03.2006, which exempts certain CD-ROMs from duty payment if they contain educational material. The search conducted at the assessee's manufacturing premises revealed the production of both educational and non-educational CD-ROMs. The assessee claimed exemption under the notification for educational CD-ROMs but voluntarily agreed to pay duty for non-educational CD-ROMs. A show cause notice was issued, and duty, interest, and penalty were imposed on both the assessee and the Director. The Commissioner (Appeals) reduced the penalty, leading to appeals by both the Revenue and the assessees.

The assessees argued that the CD-ROMs in question contained educational material as per the notification and should be exempt from duty. They contended that the Revenue wrongly presumed the non-educational CD-ROMs to be video games, which would not qualify for the exemption. The Revenue acknowledged the absence of sample testing during the investigation but maintained that the assessee produced both educational and non-educational CD-ROMs, making them ineligible for the exemption.

After considering the submissions, the Tribunal noted that no samples were drawn to verify the CD-ROM contents. The Revenue presumed non-educational CD-ROMs to be video games, contrary to the notification's provisions. As the notification allowed exemption for CD-ROMs containing educational material, journals, periodicals, or newspapers, the benefit of doubt was given to the assessee. Consequently, the Tribunal set aside the duty, interest, and penalty imposed on the assessees, ruling in favor of the assessees and dismissing the Revenue's appeal.

In conclusion, the Tribunal allowed the appeals filed by the assessees and dismissed the Revenue's appeal, emphasizing the importance of evidence and correct interpretation of legal provisions in tax matters.