2012 (11) TMI 202 - AT - Central Excise

Refund claim - Area based exemption by way of refund industrial units situated in north-east area - Held that - Notification No.32/99-CE dated 08.07.1999 is meant for encouraging industrial growth as well as expansion of existing industrial units in the north-eastern sector. Therefore, the Notification No.32/99-CE deserves to be interpreted liberally so as to give effect to its objective and purpose. For calculating the refund amount as per the said Notification No.32/99-CE dated 08.07.1999 the value of the complete tube is relevant but not the bare tube excluding the value of caps. - refund of the duty paid through PLA during the relevant period had not been disputed in the present case. - for the subsequent period, the adjudicating authority on de novo adjudication of order-in-original on a remand from this Tribunal had accepted the interpretation that for extending the benefit of Notification No.32/99-CE dated 08.07.1999, the value of caps ought to be included in the total value of Lamitubes. - refund to be allowed.

Summary

Issues:
- Eligibility of exemption under Notification No.32/99-CE dated 08.07.1999 for industrial units.
- Inclusion of value of caps in the total value of tubes for refund claim.

Analysis:
1. Issue 1 - Eligibility of exemption under Notification No.32/99-CE:
The case involved an appeal by the Revenue against an order-in-appeal regarding a refund claim filed by the appellant under Notification No.32/99-CE dated 08.07.1999. The dispute centered around whether the caps fitted on tubes by the appellant, purchased from outside, were eligible for exemption under the said notification. The Commissioner(Appeals) had allowed the refund claim, considering the caps as part of the tubes. The Tribunal analyzed the notification's language and held that manufacturers in the north-eastern region were entitled to the benefits under the notification on goods manufactured and cleared by them. The Tribunal concluded that the caps, although purchased and fitted externally, were integral to the tubes and subject to excise duty, making them eligible for the exemption.

2. Issue 2 - Inclusion of value of caps in total value of tubes for refund claim:
The Revenue contended that the caps' value should not be included in the total value of tubes for the refund claim under the notification. The appellant argued that the caps were an essential part of the tubes, forming a complete product that was cleared with excise duty paid. The Tribunal referred to relevant Supreme Court judgments emphasizing strict interpretation of exemption notifications while considering the object and purpose of such notifications. Applying these principles, the Tribunal interpreted the notification liberally to promote industrial growth in the north-eastern region. It held that for calculating the refund amount under the notification, the value of the complete tube, including the caps, was relevant. The Tribunal dismissed the Revenue's appeal, citing that the refund amount had not been disputed, and the interpretation regarding the value of caps had been accepted in subsequent proceedings.

In conclusion, the Tribunal upheld the Commissioner(Appeals)'s decision, allowing the refund claim and dismissing the Revenue's appeal based on the liberal interpretation of the exemption notification to include the value of caps in the total value of tubes for the refund claim.