2014 (12) TMI 1085 - AT - Central Excise

Benefit of Notification No. 5/2006-CE dated 1.3.2006 - clearance of Silver till 16.1.202. Sr No 25 of Notifications - On being amended by Notification No 2/2012-CE dated 16.1.2012 and the word silver was deleted from the entry mentioned at Sr No,. 25 of the said Notification No. 5/2006-CE dated 1.3.2006. As a result of the said amendments, appellant started paying duty on silver from 17.1.2012 onwards - SCN issued for recovery of Central Excise duty on the clearances of silver during the period 1.3.2001 to 16.1.2012 under Section 11A(1) - whether appellant is eligible for the benefit of nil rate duty on the silver which arises/manufactured during the continuous process of manufacturing of copper cathode or not. - Held that - It can be seen from the existing entries under Notification No. 5/2006 at Sr No. 25, exempts silver in their primary form and it is undisputed appellant had availed the benefit of this entry. The said Notification No. 5/2006-CE underwent an amendment wherein an entry No. 21C was inserted which indicated that sliver in any form is liable to concessional duty, which arises during copper smelting from copper ore or concentrate. For the period in question in this case i.e., 1.3.2011 to 16.1.2012 both the entries entry No 25 and entry No.21C were present in Notification No. 5/2006-CE. Reasoning recorded by the Adjudicating Authority are incorrect. First of all, when the Notification No. 5/2006-CE was amended, it did not amend the general entry No. 25 in the said notification; secondly, this lacunae was subsequently rectified by Notification No. 02/2012-CE dtd 16.1.2012 wherein the word silver from entry No. 25 was deleted. It is undisputed that the appellant was manufacturing silver in primary form during the manufacture of copper. When the two benefits are available to the appellant under the same Notification, the most beneficial entry suitable to him can be availed, is the settled law. We find that the apex court in the case of Share Medical Care 2007 (2) TMI 2 - SUPREME COURT OF INDIA has held so. - Decided in favour of assesse.

Summary

Issues Involved:
Levy of duty on silver produced during the copper smelting process; Interpretation of Notification No. 5/2006-CE dated 1.3.2006 and subsequent amendments; Applicability of different entries under the notification; Benefit of 'nil' rate duty on silver; Dispute over the correct entry for concessional duty on silver; Judicial interpretation of conflicting benefit provisions under the same notification.

Analysis:

1. Levy of Duty on Silver Produced During Copper Smelting Process:
The appeal revolved around the issue of whether the appellant was liable to pay duty on the silver generated during the process of manufacturing copper cathode. The silver was a by-product of the copper smelting process carried out by the appellant.

2. Interpretation of Notification No. 5/2006-CE and Subsequent Amendments:
The case involved a detailed analysis of Notification No. 5/2006-CE dated 1.3.2006 and its subsequent amendments, particularly the insertion of a new entry (Sr No. 21C) that specified concessional duty rates for silver produced during copper smelting.

3. Applicability of Different Entries Under the Notification:
The appellant had availed benefits under the original entry (Sr No. 25) of Notification No. 5/2006-CE. However, subsequent amendments introduced a new entry (Sr No. 21C) specifically addressing silver produced during the copper smelting process.

4. Benefit of 'Nil' Rate Duty on Silver:
The appellant had initially availed the benefit of 'nil' rate duty on silver under the original entry (Sr No. 25) of the notification. The subsequent amendments altered the duty rates applicable to silver, leading to a dispute over the correct entry for concessional duty.

5. Dispute Over the Correct Entry for Concessional Duty on Silver:
The crux of the issue was determining the appropriate entry (Sr No. 25 or 21C) under the notification for the concessional duty on the silver manufactured during the copper smelting process. The appellant's liability for duty payment hinged on the correct interpretation of these entries.

6. Judicial Interpretation of Conflicting Benefit Provisions:
The appellant argued that when faced with conflicting benefit provisions under the same notification, they had the right to choose the more beneficial entry. Citing relevant judgments, the appellant contended that authorities must grant the most advantageous benefit available to the assessee.

7. Judgment and Conclusion:
After considering the submissions and legal precedents, the Tribunal found in favor of the appellant. The impugned order was deemed incorrect, and the appeal was allowed with consequential relief. The Tribunal's decision was based on the principle that when multiple beneficial entries exist, the assessee is entitled to choose the more advantageous option.

This detailed analysis of the judgment provides a comprehensive overview of the issues involved, the legal arguments presented, and the ultimate decision rendered by the Tribunal.