2005 (3) TMI 121 - SC - Central Excise

Wheteher by virtue of the words under Chapter 52, Chapter 54 or 55 in Column 4, the exemption under Notification 82/88-C.E., dated 1st March, 1988 was only available to goods, the base fabric of which was classified under any of those Chapters? Held that - It is clear from the language of the Notification that the exemption was granted to the goods described in Column 3. Column 3 speaks of base fabrics of cotton . The word cotton is not limited by reference to any Chapter Heading. Therefore, textile fabrics impregnated, coated, covered or laminated with plastics of base fabric of any form of cotton under any Chapter of the Central Excise Tariff Act, would be entitled to the benefit of the Notification at the rates specified under Column 4. As far as the rate is concerned the applicable rate would be that which was leviable on base fabrics under Chapter 52, Chapter 54 or 55 as specified against the various serial numbers in the Notification. Incidentally, It may also be mentioned that in the present case, the appellant s base fabric was cotton which was classifiable under Chapter 60 Tariff Heading 60.01. By Notification 109/86-C.E., dated 27-2-1986 the rate of duty as far as goods classifiable under, inter alia, Heading No. 60.01 was put on par with the rate for woven fabrics falling under, inter alia, Chapters 52, 54 or 55. In real terms therefore there was no distinction, as far as rates were concerned, with regard to the appellant s goods.

Summary

Issues involved: Interpretation of Notification 82/88-C.E. dated 1st March, 1988 under Section 8 of the Central Excise Rules, 1944 exempting goods from excise duty based on the description specified in the table annexed to the Notification.

Analysis:
1. The core issue in the appeal revolved around the language of Notification 82/88-C.E. dated 1st March, 1988, which exempted specific goods from excise duty based on the description provided in the table attached to the Notification.

2. Both the Commissioner and the Tribunal concluded that the exemption applied only to goods with base fabrics classified under specific Chapters mentioned in Column 4 of the table.

3. The appellant's counsel argued that Column 4 was solely for determining the rate and not for defining the goods, citing a previous court decision to support their stance.

4. The Tribunal's Larger Bench, in a separate case, held that the reference to Chapter Headings in the rate column did not restrict the base fabrics to materials from those Chapters, setting a precedent for the current appeal.

5. The Supreme Court analyzed the Notification's language and determined that the exemption applied to goods with base fabrics of cotton without limitation to any specific Chapter Heading, thereby extending the benefit to textile fabrics with cotton base fabrics under any Chapter of the Central Excise Tariff Act.

6. Additionally, the Court noted that the appellant's goods, with a base fabric of cotton under Heading No. 60.01, were subject to the same duty rate as fabrics falling under Chapters 52, 54, or 55, ensuring no distinction in rates.

7. Referring to a previous case involving Tariff Heading 26AA, the Court emphasized the importance of interpreting the language of tax-related entries accurately, even if poorly drafted, to determine the true scope of exemptions.

8. Upholding the decision of the Tribunal's Larger Bench, the Court ruled in favor of the appellant, stating that the Notification's language supported the exemption claim, thereby setting aside the previous judgment.

9. Finally, the Court dismissed other related appeals while affirming the decision in the main appeal, providing a comprehensive resolution to the issues raised in the case.