2002 (1) TMI 164 - AT - Central Excise

Silver oxide - Exemption - Burden of proof - Strictures against Commissioner - Aircraft parts

Summary

Issues Involved:
1. Eligibility for exemption u/s Notification No. 6/2000 for Silver Oxide Zinc Storage/Nickel Cadmium batteries.
2. Interpretation of Section Note 2(f) of Section XVII and its applicability.
3. Relevance of prior judgments and certificates issued by the Ministry of Defence.

Summary:

1. Eligibility for exemption u/s Notification No. 6/2000 for Silver Oxide Zinc Storage/Nickel Cadmium batteries:
The appellant sought exemption for Silver Oxide Zinc Storage/Nickel Cadmium batteries supplied to Air Force stations, claiming benefit u/s Notification No. 6/2000. The Commissioner rejected the claim, stating that the batteries could not be classified as parts of aeroplanes under Chapter 88 due to their classification under Chapter 85, which excludes electrical machinery and equipment from the definition of parts of aeroplanes. The Commissioner relied on the decision in Winter Misra Diamond Tools Ltd., emphasizing strict interpretation of exemption notifications.

2. Interpretation of Section Note 2(f) of Section XVII and its applicability:
The Commissioner argued that Section Note 2(f) of Section XVII, which excludes electrical machinery and equipment from being classified as parts of aeroplanes, applied to the batteries in question. The appellant countered that the notification in question was broader, exempting parts of aeroplanes falling under any chapter. They argued that the Commissioner misinterpreted the notification and the judgment in Winter Misra Diamond Tools Ltd., which dealt with a different context.

3. Relevance of prior judgments and certificates issued by the Ministry of Defence:
The appellant presented certificates from the Ministry of Defence confirming that the batteries were specifically designed and tested for use in aircraft. They cited judgments, including Century Textiles and Industries Ltd., which supported their claim that parts used in aircraft, regardless of chapter classification, were eligible for exemption. The Tribunal found that the appellant provided substantial evidence that the batteries were parts of aircraft, shifting the burden of proof to the Revenue, which failed to rebut this evidence.

Conclusion:
The Tribunal concluded that the Commissioner erred in his interpretation and application of the notification and relevant judgments. It was determined that the batteries qualified for exemption as parts of aircraft, and the appeal was allowed, setting aside the impugned order.