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2019 (12) TMI 108 - AT - Central ExciseLevy of excise duty - mobile phone battery and LED Bulb - taxable at 12.5% excise duty on mobile phone battery and LED Bulb or not - General Exemption Notification No. 46 dated 01 March, 2011 or benefit of General Exemption Notification No. 50 dated 17 March, 2012 for LED Bulb - whether battery chargers, PC connectivity cables, memory cards and hands-free headphones of mobile handsets are restricted to accessories or cover parts and components of mobile handsets also? HELD THAT - A bare perusal of the description of excisable goods leaves no manner of doubt that the aforesaid qualify accessories only and have no relation to parts or components because it cannot be doubted that battery chargers, PC connectivity cables, memory cards and hands-free headphones of mobile handsets are not parts or components of mobile handsets and are accessories. If that be so, mobile phone battery is a part or component of the mobile handset because without a battery, the mobile handset cannot function. Such being the position, the Commissioner fell an error in concluding that the mobile phone battery would not be entitled to the benefit of the General Exemption Notification dated 01 March, 2011. The imposition of penalty or interest, therefore, also cannot be sustained. LED Bulbs - HELD THAT - The Appellant is not contesting the finding recorded by the Commissioner in relation to imposition of excise duty on LED bulbs, it is not necessary for us to deal with this issue. Time limitation - HELD THAT - The issue of limitation also is not required to be addressed since it has been held that the Department was not justified in denying the benefit of the General Exemption Notification dated 01 March, 2011 for imposition of duty on mobile phone battery. The impugned order, insofar as it directs the Appellant to pay Central Excise Duty on mobile phone charger and with interest and penalty is, accordingly, set aside - appeal allowed.
Issues:
1. Applicability of General Exemption Notification No. 46 dated 01 March, 2011 to mobile phone battery. 2. Interpretation of the scope of items covered under the General Exemption Notification. 3. Claiming benefit of Exemption Notification dated 17 March, 2012 for LED Bulb. 4. Imposition of excise duty on mobile phone battery and LED Bulb. 5. Error in Commissioner's decision and imposition of penalty and interest. Issue 1: Applicability of General Exemption Notification No. 46 dated 01 March, 2011 to mobile phone battery: The dispute revolved around the contention that the Appellant was required to pay 12.5% excise duty on mobile phone battery and LED Bulb, and could not avail the benefit of the General Exemption Notification. The Commissioner confirmed the demand, citing short payment of duty on mobile battery and LED bulb. The Appellant claimed benefit under the Notification but was denied. The Tribunal held that mobile phone battery qualifies as a part or component of the mobile handset, making it eligible for the General Exemption Notification. The Commissioner's conclusion was deemed erroneous, leading to the setting aside of the imposition of penalty and interest. Issue 2: Interpretation of the scope of items covered under the General Exemption Notification: The Commissioner contended that the benefit of the Notification was limited to specific items like battery chargers, PC connectivity cables, memory cards, and hands-free headphones of mobile handsets. However, the Tribunal clarified that these items were accessories and did not cover parts or components of mobile handsets. As the mobile phone battery was considered a part of the mobile handset, it was entitled to the benefit of the General Exemption Notification, contrary to the Commissioner's interpretation. Issue 3: Claiming benefit of Exemption Notification dated 17 March, 2012 for LED Bulb: The Appellant had claimed benefit under the Exemption Notification for LED bulbs, but they decided not to contest the imposition of duty on LED bulbs during the appeal. The Tribunal did not address this issue further as the Appellant withdrew their challenge, rendering it unnecessary to delve into the matter. Issue 4: Imposition of excise duty on mobile phone battery and LED Bulb: The Commissioner imposed excise duty on the mobile phone battery and LED Bulb, which was challenged by the Appellant. The Tribunal's analysis focused on the eligibility of the mobile phone battery for exemption under the General Exemption Notification, ultimately leading to the setting aside of the duty, interest, and penalty imposed on the Appellant. Issue 5: Error in Commissioner's decision and imposition of penalty and interest: The Tribunal found errors in the Commissioner's decision regarding the eligibility of the mobile phone battery for exemption under the General Exemption Notification. Due to this error, the imposition of penalty and interest was deemed unsustainable, resulting in the setting aside of the order directing the Appellant to pay Central Excise Duty on the mobile phone charger. This detailed analysis of the judgment highlights the key legal issues, interpretations, and conclusions reached by the Tribunal in the case.
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