1999 (12) TMI 216 - AT - Central Excise

Summary

Issues:
1. Eligibility of rubberised coir mattresses and cushions for exemption under Notification No. 115/75-C.E.

Analysis:
The case involved an application for waiver of duty demand and penalty by M/s. Regal Industries Ltd. for manufacturing rubberised coir mattresses and cushions. The Commissioner of Central Excise held that the products were not entitled to exemption under Notification 115/75-C.E. due to not meeting the criteria. The applicants argued that their products contained 55% coir, making them eligible for the exemption as per Circular No. 13/14/86-CX.1. They presented test reports supporting their claim, which the Commissioner disregarded without sufficient reason. The Revenue relied on an opinion by Shri Paramjeet Singh, a Chemical Engineer, who never visited the factory or examined the samples, raising doubts about the validity of his opinion. The applicants also disputed the invocation of the extended period of limitation, stating they had informed the Revenue Department about their products at the start of production. Additionally, they highlighted financial hardship and losses incurred by the unit, supported by an audit report.

The Revenue contended that the products did not qualify as coir industry goods based on various definitions and documents submitted by the applicants. They argued that the test report was inconclusive for the period in question, emphasizing the use of more rubber than coir in production. The Revenue also challenged the claim of informing the Revenue Department through registered letters, stating no evidence was provided. They opposed the plea of financial hardship, citing sufficient income from sales. The Revenue sought dismissal of the applicants' claims.

The Tribunal analyzed the issue of eligibility under Notification 115/75-C.E. for rubberised coir mattresses and cushions. Considering the lack of a defined coir industry in the notification or related laws, the Tribunal referenced Circular No. 13/14/86-CX.1 clarifying the eligibility criteria. The test report showed the coir content exceeding 55%, supporting the applicants' claim. The reliance on Shri Paramjeet Singh's opinion was questioned due to lack of direct inspection or sample examination. The Tribunal found in favor of the applicants, waiving the duty and penalties, and stayed the recovery during the appeal process. The decision was based on the test report and the Board's circular, concluding that the applicants met the exemption requirements.