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2018 (12) TMI 154 - AT - Central ExciseConcessional rate of duty - manufacture of Usha brand Sewing Machine Heads - benefit of N/N. 01/2011-CE dated 01.03.2011 claimed - benefit of notification denied on the ground that the said Sewing Machine Head was having fly wheel with a groove and that groove could facilitate attachment of electric motor to the said Sewing Machine Heads - Held that - It is understood from the wording of entry that if Sewing Machine are cleared in such a manner that they are not operated with electric motors then such Sewing Machines are cleared from the factory of manufacturer, thus they are eligible for the benefit of N/N. 1/2011-CE dated 01.03.2011 as amended by N/N. 8/2014-CE dated 11.07.2014. It is undisputed fact that the appellants were manufacturing only Sewing Machine Heads which were cleared without any electrical control or electric motor - appellant were eligible for the benefit - appeal allowed - decided in favor of appellant.
Issues involved:
Interpretation of exemption notification for Sewing Machine Heads under Central Excise duty. Detailed Analysis: The appeal was filed against the Order-in-Appeal passed by the Commissioner of Central Excise (Appeals), Noida, denying the appellant the benefit of exemption under Notification No.01/2011-CE dated 01.03.2011, as amended by Notification No.08/2014-CE dated 11.07.2014. The appellant was manufacturing Usha brand Sewing Machine Heads during the period from July, 2014 to June, 2016, and was availing exemption under the said notification, paying an effective rate of duty of 2%. The issue arose when the revenue contended that the Sewing Machine Heads manufactured by the appellant were not eligible for the exemption as they had a flywheel groove that could facilitate attachment of an electric motor. This led to a demand of differential duty through a show cause notice dated 06.01.2017, resulting in a demand of Central Excise duty amounting to ?49,43,870. The Original Authority upheld the demand and penalty, which was further confirmed by the Commissioner (Appeals), leading to the appellant's appeal before the Tribunal. During the proceedings, the appellant argued that the Sewing Machine Heads they manufactured were supplied without any electric control or electric motor, making them eligible for the benefit of the notification. The Tribunal, after considering the arguments and examining the wording of the entry for exemption, concluded that if Sewing Machines were cleared without being operated with electric motors, they were eligible for the benefit of the notification. Since the appellants were manufacturing Sewing Machine Heads cleared without any electrical control or electric motor, the Tribunal held that they were indeed eligible for the benefit of Notification No.01/2011-CE as amended. Based on their findings, the Tribunal set aside the impugned order and allowed the appeal, providing consequential relief to the appellant. The judgment emphasized the importance of the specific conditions mentioned in the exemption notification and the actual manufacturing and clearance process of the Sewing Machine Heads in determining eligibility for the exemption under Central Excise duty laws.
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