2005 (9) TMI 188 - AT - Central Excise

Summary

Issues:
Whether the benefit of exemption under Notification No. 115/75-C.E. was available to "rubberised coir pads" manufactured and supplied by the assessee.

Detailed Analysis:

1. Issue of Exemption Eligibility:
The central issue in this case revolved around determining whether the "rubberised coir pads" manufactured by the assessee were eligible for the exemption under Notification No. 115/75-C.E. The Notification exempted specific goods falling under the Schedule to the Central Excise Tariff Act, 1985, manufactured in specified industries, from the duty of excise leviable thereon. The original authority and the first appellate authority classified the product as "rubberised coir mattress" and denied the exemption. However, the appellants contended that the product in question was an intermediate stage that could be further processed into a mattress.

2. Value Addition and Product Transformation:
The appellants argued that significant value addition and transformation occurred during the conversion of the "rubberised coir pad" into a mattress. Processes such as covering the pads with foam, stitching with quality upholstery cloth, and quilting were highlighted to demonstrate the substantial changes leading to the final product being accepted in the market as a mattress. The thickness of the mattress was stated to be higher than that of the pad, with a value addition ranging from 20% to 80%.

3. Interpretation of Exemption Clause:
The Tribunal acknowledged the value addition and transformation processes involved in converting the pads into mattresses. It was emphasized that the "rubberised coir pads" could not be equated with "rubberised coir mattresses" as mentioned in the goods excluded from the exemption under the Notification. Therefore, the Tribunal concluded that the assessee's products, i.e., the "rubberised coir pads," were indeed eligible for the exemption under the Notification.

4. Decision and Conclusion:
Based on the analysis of the processes involved, the Tribunal set aside the previous order and allowed the appeal in favor of the assessee. The judgment highlighted the distinction between the intermediate product of "rubberised coir pads" and the final product of "rubberised coir mattresses," emphasizing the eligibility of the pads for the exemption under the Notification. The decision was pronounced in open court on 13-9-2005.

In conclusion, the judgment clarified the eligibility of "rubberised coir pads" for exemption under the specific Notification, emphasizing the value addition and transformation processes that distinguished the intermediate product from the final product of mattresses.