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1996 (12) TMI 193 - AT - Central Excise

Issues: Interpretation of Notification No. 185/86 for exemption of duty rate on electrical insulation tape under Tariff Item No. 68.

In this case, the appellants were manufacturing electrical insulation tape classified under Tariff Item No. 68, initially attracting a duty rate of 12%, which was later increased to 15% under the new tariff. The appellants paid the increased duty but subsequently filed a refund claim, arguing that Notification No. 185/86, dated 1-3-1986, continued the effective rate as per the previous tariff. The Assistant Collector rejected the claim, stating that the appellants did not fall under any of the notifications specified in Annexure-II of the notification. The Collector (Appeals) disagreed with the Assistant Collector's interpretation, holding that Annexures I & II had to be read separately. The Collector also referred to Notification 200/86, limiting the exemption only to factories falling under Annexure-II of Notification 185/86. The Revenue appealed, claiming that both Annexures had to be read together and not in isolation.

The dispute centered around the interpretation of the impugned notification, which provided an exemption for goods classified under Tariff Item No. 68 for a specified period. Annexure I listed the goods eligible for the exemption, while Annexure II contained specific notifications related to the exemption. The Tribunal noted that while Annexure I seemed to grant the benefit to all assessees manufacturing goods under Tariff Item 68, the actual benefit had to be availed as per the notifications specified in Annexure-II. These notifications referred to goods manufactured in different types of industries, and the benefit was limited to those factories enumerated in the notifications listed in Annexure-II. The Tribunal concluded that the Collector's interpretation was incorrect, and the benefit of the notification was restricted to goods manufactured in factories specified in the notifications in Annexure-II. Consequently, the Tribunal set aside the Collector's order and allowed the appeal of the Revenue.

 

 

 

 

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