2016 (7) TMI 652 - AT - Central Excise

Eligibility of notification No. 7/2003 exempting articles of apparel or clothing if manufactured or got manufactured for personal use not intended for sale - assessee pleaded that the Commissioner (Appeals) having decided availability of exemption notification, in their favour, should have set aside the order in original in its totality instead of remanding the matter back to him for verification - Held that - After having gone through the impugned order of the Commissioner (Appeals), we find that the matter stand remanded by him for examining and verifying the factual position which in our view is necessary to extend the benefit of notification. It is only in particular circumstances, the exemption is available to the assessee and fact that wherever they have claimed the exemption for manufactured garments which are meant for individual use or not are essential for extending benefit of such notification. As such, we do not find any infirmity in the views of appellate authority and accordingly, direct the adjudicating authority to do the verification in terms of the directions as contained in the order of Commissioner (Appeals). In the foregoing discussion, the appeal is rejected.

Summary

Issues: Interpretation of exemption notification for articles of apparel manufactured for personal use; Verification of factual position for extending the benefit of notification; Remand by appellate authority for verification; Appeal against remand order.

The judgment revolves around the interpretation of a notification exempting articles of apparel manufactured for personal use from excise duty. The appellant, engaged in manufacturing readymade garments, availed this exemption for garments made for personal use not intended for sale. However, a dispute arose regarding the application of the exemption when the material was not supplied by the customers. The revenue initiated proceedings against the appellant, claiming the exemption applied only when material was provided by customers. The appellate authority interpreted the notification in favor of the appellant but remanded the matter for verification of whether the garments were indeed for personal use. The appellant argued that the entire original order should have been set aside instead of remanding for verification.

The key contention was whether the exemption applied to garments made for individual personal use, regardless of the source of material. The appellate authority emphasized the need to verify if the clearances were genuinely for personal use to extend the benefit of the notification. The appellate tribunal upheld the remand decision, stating that verifying whether the manufactured garments were meant for individual use was crucial for determining the eligibility for the exemption. The tribunal found no fault in the appellate authority's decision and directed the adjudicating authority to conduct the necessary verification as per the remand order to ensure compliance with the notification requirements.

In conclusion, the appellate tribunal rejected the appeal, emphasizing the importance of verifying whether the manufactured garments were genuinely for personal use to qualify for the exemption under the notification. The tribunal upheld the remand decision, highlighting the necessity of factual verification for extending the benefit of the exemption and directed the adjudicating authority to conduct the required verification as per the appellate authority's directions.