2004 (5) TMI 114 - AT - Central Excise

Summary

Issues:
Entitlement to claim nil rate of duty for paper products under Heading 4801.00 of the Central Excise Tariff Act based on inclusion in Schedule I of the Newsprint Control Order.

Analysis:
The appeal raised the issue of whether the assessee is entitled to claim the benefit of nil rate of duty for paper products classified under Heading 4801.00 of the Central Excise Tariff Act by being included in Schedule I of the Newsprint Control Order. The Central Government defined "newsprint" under Notification No. 23/98-C.E., dated 1-8-98 as paper intended for printing newspapers and manufactured by a specified newsprint manufacturer. The appellants applied for inclusion in Schedule I on 23rd December 1999 and were registered on 4-5-2000. They made clearances from October 1999 to May 2000, not claiming the benefit for clearances before 23-12-99. The appellant argued that once notified, the benefit should be available from the application date, citing a Supreme Court decision regarding the entitlement of benefits from the date of application.

The Supreme Court decision referred to emphasized granting exemptions liberally to small scale industries, extending benefits from the application date. The Tribunal found merit in applying this principle to the case, noting the appellant's application on 23rd December 1999 and subsequent communication confirming their inclusion in Schedule I. Consequently, the appellant should be treated as included in the Schedule from 23-12-1999 for the purpose of the nil rate of duty under the Central Excise Tariff Act. The matter was remanded to the adjudicating authority for calculating duty liability before 23-12-1999, with adjustments allowed from the pre-deposit amount. Additionally, the penalty imposed on the appellant was set aside in light of the findings, leading to the disposal of the appeal in favor of the appellant.