1999 (2) TMI 320 - AT - Central Excise

Summary

Issues:
1. Interpretation of duty exemption under Notification 49/86 for footwear components.
2. Alleged procedural violations regarding the despatch of sample shoes.

Analysis:
1. Interpretation of duty exemption under Notification 49/86 for footwear components:
The appeal challenged the Order-in-Original confirming duty demand and imposing a penalty based on two alleged violations. Firstly, the issue revolved around whether the exemption under Notification 49/86 applied to footwear heels with soles made of wood, leather, and synthetic rubber. The appellant argued that since the Notification did not explicitly require exclusivity of wood or leather and did not mention words like "exclusive" or "alone," the exemption should apply as long as the items were predominantly made of wood or leather, which was undisputed. Citing precedents, the appellant contended that the presence of other materials, such as rubber sheets, should not result in denial of the duty exemption. The Tribunal agreed, emphasizing that the absence of terms like "exclusive" in the Notification meant that the exemption should be broadly interpreted. Therefore, the Tribunal set aside the duty confirmation related to heels and soles with rubber sheets affixed, granting exemption under the Notification.

2. Alleged procedural violations regarding the despatch of sample shoes:
The second issue concerned the illegal dispatch of sample shoes without punched soles to the Head Office for foreign buyers as samples, which were not returned to the factory. The appellant decided not to contest this violation further. Consequently, the Tribunal did not interfere with the duty confirmation related to the sample shoes, amounting to Rs. 57,433.35. As the substantial duty demand was set aside in the first issue, the Tribunal reduced the penalty from Rs. 5,000 to Rs. 2,000. The appeal succeeded partially, with the duty exemption granted for heels and soles with rubber sheets, while the duty confirmation for sample shoes remained upheld due to the appellant's decision not to press that issue further.