2018 (2) TMI 385 - AT - Central Excise

Benefit of N/N. 148/73 CE dated 21.07.73 - Veneered Particle Boards Commercial - Held that - On a perusal of the Trade Notice No. 26/70 dated 21.02.1970, it has been clarified the position with reference to the N/N. 201/69 dated 16.08.1969 it is clarified that the tariff value is to be determined on the basis of the plywood. The Trade Notice has clarified that the Veneered Particle Board on which decorative plywood is pasted on either or both sides are to be assessed as though it consisted only of said plywood - the Trade Notice has not clarified the aspect of whether the Veneered Particle Board without the plywood will be eligible for such benefit - the reference to Trade Notice is not relevant to decide the issue before us. It is on record that some of the show-cause notices have cited Rule 10 for demand of the differential duty whereas the certain other show-cause notices have cited Rule 10A of the erstwhile Central Excise Rules, 1944. Appeal allowed - decided in favor of Department.

Summary

Issues involved:
1. Interpretation of Notification No. 148/73 regarding the benefit eligibility for Veneered Particle Board.
2. Application of clarification issued in 1989 retrospectively.
3. Validity of demands made under Rule 10A instead of Rule 10.

Detailed Analysis:

1. Interpretation of Notification No. 148/73:
The case involved a dispute over the interpretation of Notification No. 148/73 regarding the benefit eligibility for Veneered Particle Board. The Revenue contended that the goods in question did not fall under Explanation (II) of the Notification as they were Particle Boards not covered by the explanation. The original authority found that the goods did not have plywood panels on one or both sides, thus not covered by the Notification. The Commissioner (Appeals) dropped the demands based on historical practices and the benefit of the Notification. The Appellate Tribunal analyzed the nature of the goods and concluded that the benefit of the Notification could only be extended if the Particle Boards were covered with plywood panels on one or both sides. As the goods did not meet this criterion, the benefit could not be granted.

2. Application of 1989 clarification:
The Revenue challenged the Commissioner's decision based on the 1989 Board Circular denying the benefit retrospectively. The Tribunal held that the 1989 clarification was not necessary to determine the ineligibility of the goods for the benefit, as the wording of the explanation itself indicated the same. The Tribunal concluded that the clarification only clarified the position at a later date and did not impact the earlier period's eligibility for the benefit.

3. Validity of demands under Rule 10A:
The issue of demands raised under Rule 10A instead of Rule 10 was also raised. The Tribunal referred to the Supreme Court's decision in J.K. Steel Ltd. case, stating that citing the wrong rule in a show-cause notice does not vitiate the demand if the issuing authority is competent under the correct rules. Therefore, the Tribunal held that citing Rule 10A instead of Rule 10 did not invalidate the demand proceedings. Consequently, the Tribunal set aside the Commissioner's order and allowed the appeal of the Revenue.

This detailed analysis of the judgment highlights the key legal interpretations and arguments presented by both parties, leading to the Tribunal's decision on each issue involved in the case.