2023 (3) TMI 827 - AT - Central Excise

Applicability of exemption Notification No. 4/2006-CE dated 1.3.2006 at Sl. No. 72 - matches classifiable under Chapter 3605.00.10 or 3605.00.90? - HELD THAT - The issue involved in these appeals has been already settled in favour of the Revenue by this Tribunal by denying exemption under Notification No. 4/2006-CE dated 1.3.2006 in the case of M/S SRI GANAPATHY PACKAGING VERSUS THE COMMISSIONER OF GST CENTRAL EXCISE 2020 (2) TMI 1114 - CESTAT CHENNAI . The facts and issue being identical in these appeals, there are no ground to take a different view - the demands were sustained and the assessees appeals were dismissed.

Summary

Issues Involved:
1. Applicability of exemption Notification No. 4/2006-CE dated 1.3.2006.
2. Interpretation of the term "ordinarily" in the context of the exemption notification.
3. Relevance of power usage in the manufacturing process for claiming exemption.
4. Impact of previous judicial decisions and circulars on the present case.

Summary:

1. Applicability of Exemption Notification No. 4/2006-CE:
The appellants challenged the denial of exemption u/s Notification No. 4/2006-CE dated 1.3.2006, which prescribes a nil rate of duty for matches if no power is used in specific processes such as frame filling, dipping, filling of boxes, pasting of labels, or packing. The Tribunal upheld the denial of exemption, noting that the appellants purchased match splints from manufacturers who used power in their production.

2. Interpretation of "Ordinarily":
The Tribunal emphasized that the term "ordinarily" broadens the restriction scope. It applies to the general commercial practice of using power in the specified processes, not just the specific instance of the appellants. Therefore, the burden is on the assessee to prove that power is not ordinarily used in these processes, which the appellants failed to do.

3. Relevance of Power Usage:
The Tribunal reiterated that the exemption is not available if power is used in any of the specified processes, regardless of who uses it. This interpretation aligns with the precedent set by the Hon'ble Supreme Court in Standard Fireworks Industries Vs. CCE and the Constitutional Bench decision in Dilip Kumar & Co., which mandate strict interpretation of exemption notifications.

4. Impact of Previous Judicial Decisions and Circulars:
The Tribunal dismissed the appellants' reliance on CBEC Circular No. 1/93-CX and other judicial decisions, stating that each notification and circular is context-specific. The Tribunal cannot extend the applicability of one notification to another without explicit legislative intent. The Tribunal also noted that the CBEC circulars are not binding on the Tribunal and cannot override Supreme Court rulings.

Conclusion:
The Tribunal, following the majority order and the principles laid down by the Supreme Court, concluded that the appellants are not entitled to the benefit of exemption Notification No. 4/2006-CE. Consequently, the demands were sustained, and the appeals were dismissed.