2006 (7) TMI 207 - SC - Central Excise

Whether the respondent is entitled to the benefit of exemption under exemption notification No. 115/75-C.E., dated 30th April, 1975? Held that - Respondent has rightly been held entitled to avail of the exemption notification in view of the clarification issued by the Coir Board. There is no illegality or infirmity in the findings recorded by the Tribunal. In favour of assessee.

Summary

Issues involved:
1. Entitlement to exemption under exemption notification No. 115/75-C.E., dated 30th April, 1975.

Comprehensive Analysis:
The primary issue in the present appeals revolved around whether the respondent was entitled to the benefit of exemption under exemption notification No. 115/75-C.E., dated 30th April, 1975. The respondent, engaged in manufacturing Rubberised Coir Mattresses and Cushions, claimed exemption from excise duty under the said notification. The Department issued show cause notices questioning the eligibility of the respondent for the exemption, contending that the product manufactured was not covered under the notification as it was viewed as a rubber-based industry rather than a coir-based one. The assessing authority rejected the respondent's claim, leading to the imposition of a penalty. However, the Customs, Excise & Gold (Control) Appellate Tribunal accepted the respondent's appeal, ruling in favor of the respondent and dropping the demand against them.

The Tribunal's decision was based on the clarification issued by the Coir Board, Government of India, Cochin, confirming that rubberised coir industry should be considered as part of the coir industry for the purpose of excise duty exemption. The Coir Board's clarification highlighted that rubberised coir mattresses were eligible for exemption under the notification in question. The respondent's contention that they were a rubber-based industry was refuted by the fact that they held a license from the Coir Board to operate as a coir industry, not from the Rubber Board. Chemical analysis of the mattresses produced showed that they contained 55.5% coir, undermining the argument that they had less than 50% coir content.

The Supreme Court referred to previous judgments in similar cases, such as Collector of Central Excise, Meerut v. Coir Cushion P. Ltd. and Commissioner of Central Excise, Meerut v. Hindustan Coir Products Ltd., where the respondents were held entitled to avail of the exemption notification. Relying on the Coir Board's clarification and the consistency in previous decisions, the Court dismissed the appeals, finding no merit in them and ordering no costs to be paid. The Court affirmed the Tribunal's decision, emphasizing the eligibility of rubberised coir industry for exemption under the notification in question.