2008 (4) TMI 44 - SC - Central Excise

Whether exemption is available to plastic product SUNPAC u/not. 4/97 - As per not. 4/97 goods classifiable u/h 39.23 39.24 and 39.26 of CETA were fully exempt assessee claimed classification u/sh 3926.90 revenue sought classification u/h 3920.39 as a sheet of plastic held that product would not be classifiable either under CH 3926.90 or 3920.39 but the same would fall u/h 39.16 hence exemption not available u/not. 4/97 - exemption has already been removed both appeals dismissed

Summary

Issues:
Classification of product under Central Excise Tariff Act for exemption eligibility.

Analysis:
1. The primary issue in this case was whether the respondent was eligible for the benefit of exemption under Entry 57 of Notification No. 4/97 dated 1st March 1997 for the product 'SUNPAC' it manufactured. The entry provided full exemption from duty for goods classifiable under specific headings of the Central Excise Tariff Act, excluding certain specified goods.

2. The respondent claimed classification of the product under sub-heading 3926.90 of Chapter 39, while a show cause notice contended that the product should be classified under Chapter Heading 3920.39 as a sheet of plastic. The Assistant Commissioner initially dropped the demand based on a Tribunal decision, but the Commissioner (Appeals) reversed this decision, leading to an appeal by the respondent.

3. The Tribunal determined that the product did not fall under either Chapter Heading 3926.90 or 3920.39, instead classifying it under Heading 39.16. Consequently, the Tribunal ruled that the respondent was not entitled to the exemption under Entry 57 of the notification, as it did not cover articles of Heading 39.16.

4. The Supreme Court concurred with the Tribunal's analysis, affirming that the respondent was not entitled to claim the exemption under the impugned notification. The Court supported the Tribunal's conclusion regarding the product's classification and consequent exemption eligibility.

5. The judgment noted that the exemption in question had already been removed, and the duty was made applicable under specific Chapter Headings, namely 3926, 3920, and 3916. This information rendered the controversy moot, as the exemption had been rescinded.

6. Consequently, the appeals were dismissed, with each party bearing its own costs. The judgment provided a clear resolution to the classification and exemption eligibility issue, considering the specific provisions of the Central Excise Tariff Act and the relevant notification.