2024 (5) TMI 126 - AT - Central Excise

Benefit of nil rate of duty in terms of Notification No. 23/1998-CE dated 01.08.1998 as amended - clearance of newsprint - Non-compliance with the conditions of Notification No. 23/1998-CE dated 01.08.1998 - clearance of goods to the unregistered depots which cannot be defined as place of removal - finished goods have not been cleared against purchase order as required under the Notification - HELD THAT - The first requirement is that the subject goods must be intended for newspapers. It is not the case of the department in the show cause notice that the goods are not intended for printing of newspapers - all the conditions of chapter heading 4801 of note 4 to chapter 48 and notification issued thereunder i.e. 23/1998-CE dated 01.08.1998 stands complied with. Therefore, merely because first the goods were cleared from factory to godown and then to newspaper, the conditions of the notification does not stand contravened. Similar issue has been considered by this Tribunal in the case of SRI VENKATESA PAPER BOARDS LTD. VERSUS COMMISSIONER OF C. EX., MADURAI 2008 (7) TMI 169 - CESTAT, CHENNAI where it was held that ' The expression supplied against a purchase order placed upon such manufacturer by a newspaper does not necessarily mean that the manufacturer should supply newsprint directly to a newspaper. What was intended by the amendment was that the supply of newsprint to a newspaper must be against a purchase order placed by the latter. It could either be direct or through a depot.' It is also observed that the factory is the place of removal as per Section 4 of Central Excise Act, 1944, however, at the same time any other place from where the goods is sold after removal from the factory, the said place is also a place of removal. Therefore, whether the goods are sold from the factory or from any other place from where the goods were sold, both are statutorily considered as place of removal. Therefore, the goods sold from godown to newspaper after clearance from the factory will not take a different colour as far as the classification of goods under 4801 read with Notification No. 23/1998-CE. Thus, nil rate of duty is rightly and legally available to the appellant - the impugned order is set aside - appeal allowed.

Summary

Issues involved:
The issues involved in the judgment are the classification of newsprint reels under the Central Excise Tariff Act, 1985, compliance with Notification No. 23/1998-CE dated 01.08.1998, and the applicability of nil rate of duty for newsprint.

Classification of Newsprint:
The appellants were engaged in the manufacture of news print reels classified under subheading 48010090 and 4802990 of the Central Excise Tariff Act, 1985. They supplied newsprint to certificate holders who are publishers of newspapers registered under the Press and Registration of Books Act, 1867. The dispute arose when the goods were cleared to a depot without being supplied against a purchase order by a registered newspaper. The adjudicating authority imposed a demand for excise duty and penalty, alleging non-compliance with the conditions of Notification No. 23/1998-CE.

Compliance with Notification No. 23/1998-CE:
The appellant contended that the goods in question satisfied the requirements of the notification as they were ultimately cleared against purchase orders from registered newspapers. The appellant argued that the conditions for classification as newsprint under Chapter 48 were met, and therefore, the nil rate of duty should apply. They relied on a tribunal decision to support their position.

Applicability of Nil Rate of Duty:
The tribunal examined the conditions of the notification and found that the newsprint manufactured by the appellant was intended for printing newspapers and was supplied against purchase orders from registered newspapers. Despite the goods being cleared to a depot before reaching the newspapers, the tribunal held that the conditions for classification as newsprint were fulfilled. They emphasized that the nature of the goods as newsprint did not change when transferred from the factory to the depot and then to the newspapers. Citing relevant legal provisions, the tribunal set aside the impugned order, allowing the appeal and confirming the availability of the nil rate of duty for the appellant.