2018 (5) TMI 909 - AT - Central Excise

Benefit of concessional rate of duty - serial no. 91 of N/N. 04/2006-CE dated 01.03.2006 - the Revenue objected the same in as much as serial number 90 attracted Nil rate of duty and the appellant should have cleared their goods at Nil rate of duty the benefit of CENVAT credit would not have been available to them. Held that - Revenue cannot deny assessee s claim to benefit of concessional rate of duty if the conditions prescribed for availing such concessional rate stand satisfy by him - the assessee claim to avail serial number 91 of the notification cannot be faulted upon, specially when the condition of the said serial number stand fulfilled and the assessee cannot be compelled to avail serial number 90 of the notification - the decision in the case of Sidhmukh Flexible Packaging (P) Ltd. Vs. Commissioner of Central Excise, Indore 2005 (4) TMI 204 - CESTAT, NEW DELHI referred. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Interpretation of Notification No. 04/2006-CE dated 01.03.2006 regarding duty rates for tissue paper; Applicability of CENVAT credit and duty payment under serial numbers 90 and 91 of the notification; Dispute over denial of credit by Revenue; Precedents supporting the appellant's claim to concessional rate of duty.

Analysis:
The judgment by the Appellate Tribunal CESTAT MUMBAI involved the interpretation of Notification No. 04/2006-CE dated 01.03.2006 concerning the duty rates applicable to tissue paper. The appellant, engaged in tissue paper manufacturing, was availing benefits under serial numbers 90 and 91 of the notification. Initially, both serial numbers prescribed duty rates for the clearance of tissue paper subject to specific conditions. However, post-March 2008, serial number 90 attracted a 'Nil rate of duty,' while serial number 91 provided a 'concessional rate of duty' upon fulfilling enumerated conditions. The appellant subsequently cleared their products by utilizing CENVAT credit and paying duty under serial number 91. The Revenue objected to this approach, arguing that since serial number 90 attracted a 'Nil rate of duty,' the appellant should have cleared their goods at the 'Nil rate of duty' to be eligible for CENVAT credit. Consequently, proceedings were initiated for denying credit, leading to the impugned orders.

The Tribunal, in its analysis, referred to precedents such as Sidhmukh Flexible Packaging (P) Ltd. Vs. Commissioner of Central Excise, Orient Paper Mills Vs. Commissioner of Central Excise, and Process Pumps (India) P. Ltd. Vs. Commissioner of Central Excise. These decisions supported the appellant's claim to avail of serial number 91 of the notification if the conditions for the concessional rate were satisfied, and the appellant could not be compelled to opt for serial number 90. Given that there was no dispute that the appellant had fulfilled the conditions of serial number 91, the Tribunal found no merit in the Revenue's argument. Consequently, the impugned orders were set aside, and both appeals were allowed with consequential relief.

In conclusion, the judgment clarified the interpretation of duty rates under the notification for tissue paper, upheld the appellant's right to avail of the concessional rate of duty under serial number 91, and rejected the Revenue's contention regarding denial of credit. The decision was supported by established legal precedents, ensuring consistency in the application of tax laws and providing relief to the appellant in this case.