1999 (3) TMI 201 - AT - Central Excise

Summary

Issues:
Determining entitlement to concessional rate of duty under Notification 53/88 for Thermollyd expanded polystyrene blocks.

Analysis:
The main issue in this appeal is whether the appellants are eligible for the concessional rate of duty of 25% adv. under Sl. No. 36 of Notification 53/88 for Thermollyd expanded polystyrene blocks classified under sub-heading 3921.00 of the CETA, 1985. The denial of benefits was based on the argument that the specific Sl. No. of the Notification only covers "cellular films or sheets, other than polyurethanes," excluding blocks.

The appellant's counsel argued that according to Note 10 to Chapter 39, the expression "plates, sheets, films, foils and strips" should also include blocks of regular geometric shape. They relied on judgments of the Supreme Court to support their interpretation. On the other hand, the respondent contended that the expressions in a Notification should be read independently, and the interpretation under Chapter Notes or Section Notes of the Central Excise Tariff cannot be applied.

The Tribunal considered both submissions and noted that while the benefit of concessional rate was initially granted under a different Sl. No., the lower appellate authority denied the benefit altogether. It was clarified that the Notification covers all products of Heading 39.21 except those made of polyurethane. Since the blocks in question were not polyurethane, they should be covered by the Notification. The Tribunal referred to a Supreme Court judgment regarding the interpretation of similar provisions.

The Tribunal set aside the previous order and remanded the matter for verification of whether the conditions under Sl. No. 36 of the Notification were fulfilled. If the conditions were met, the appellants would be entitled to the concessional rate of duty. The appeal was allowed by way of remand.

In a separate assent, the Vice President emphasized the importance of interpreting exemption notifications in Central Excise. He highlighted the distinction between notifications related to the Central Excise Tariff and those that are not directly related. In this case, since the Notification explicitly referred to headings and sub-headings of Chapter 39, Chapter Notes had to be considered. The Tribunal was required to take into account the Chapter Notes and the case law cited by the appellant's counsel.

The Vice President concluded that since there was no dispute regarding the Chapter under which the goods fell and the Notification covered various headings and sub-headings of Chapter 39, the Notification applied. The only remaining question was which serial number of the table annexed to the Notification was appropriate. It was determined that the conditions of the Notification were satisfied regarding the raw material used for the blocks, and if proven, the appellants would be entitled to the benefit of Serial No. 36 in Notification 53/88. The appeal was allowed based on these findings.