2004 (11) TMI 118 - SC - Central Excise

Oxides of Iron pigments - whether the Respondents are entitled to benefit of Notification No. 114/1973 dated 30th April, 1973 - Held that - under the Notification, if any excisable good is present in the product then even though excisable good may be a binding agent, benefit of the Notification would be lost. We are unable to accept this submission. No such submission was taken before the authorities below. No such ground is taken in the Petition - Even otherwise, the three clauses of the proviso to the Notification are independent of each other. This necessarily means that excisable goods mentioned in the third clause are other than binding agents mentioned in the 1st clause. If it is a binding agent then it must exceed 4% - Decided against Revenue.

Summary

Issues:
Interpretation of Notification No. 114/1973 dated 30th April, 1973 regarding excise duty exemption for Oxide of Iron Pigments.

Analysis:
The appeal was filed against the Order of the Customs, Excise and Gold (Control) Appellate Tribunal (CEGAT) to determine whether the Respondents are entitled to the benefit of Notification No. 114/1973 dated 30th April, 1973. This Notification exempts Oxide of Iron Pigments from excise duty under certain conditions, including the absence of a binding agent of mineral oil exceeding 4% by weight, not being a paste, and not being any excisable goods other than those specified in the Schedule.

The Respondents had clarified in their Classification List that there was no binding agent exceeding 4% in their product. The Department failed to demonstrate that a binding agent exceeding 4% was present in the Respondents' product. Consequently, the Tribunal, following its previous decision, ruled that the Respondents are entitled to the benefit of the Notification.

During the proceedings, it was argued that if any excisable good is present in the product, even if it acts as a binding agent, the benefit of the Notification would be lost. However, this argument was not accepted as it was not raised before the lower authorities or in the Petition.

The Supreme Court emphasized that the three clauses of the proviso to the Notification are independent of each other. Therefore, excisable goods mentioned in the third clause are distinct from binding agents mentioned in the first clause. If a substance acts as a binding agent, it must exceed 4% to disqualify for the exemption.

Ultimately, the Supreme Court found no fault in the Tribunal's judgment and decided not to interfere. The appeal was dismissed with no order as to costs, affirming the entitlement of the Respondents to the benefit of Notification No. 114/1973.