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TMI Blog2013 (12) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... ck Stoves" classifiable under sub-heading 7321.10 and 7321.90 of Schedule to the Central Tariff Act, 1985. A show-cause notice no. 20/99, dated 3-3-1999 was issued proposing demand of duty along with interest and penalty for the period 1-3-1994 to 22-7-1996 on the ground that the respondents are liable to pay duty on parts of Wick Kerosene Stoves captively consumed in the manufacture of kerosene stoves consequent to withdrawal of Notification No. 181/88-C.E., dated 13-5-1988 by another Notification No. 64/94-C.E., dated 1-3-1994. The original authority confirmed the demand of duty of Rs. 38,73,939/- and imposed a penalty of Rs. 2 lakhs. Commissioner (Appeals) set aside the adjudication order and allowed the appeal filed by the respondent. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es v Collector of Central Excise, New Delhi reported in 1994 (70) E.L.T. 279 (Tribunal). He submits that this decision was upheld by the Hon'ble Supreme Court in the case of Collector of Central Excise, New Delhi v. Universal Electrical Industries reported in 2003 (153) E.L.T. 266 (S.C.). He further submits that subsequently the Tribunal in a series of decisions followed the Universal Electrical Industries case. He also submits that Commissioner (Appeals) also examined the demand, barred by limitation. 5. The learned Authorised Representative relied on the decision of the Hon'ble Supreme Court in the case of Elso Machines Pvt. Ltd. v Collector of Central Excise reported in 1988 (38) E.L.T. 571 (S.C.). 6. After hearing both sides ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication, the clearances of any excisable goods, which are chargeable to nil rate of duty or, which are exempted from the whole of duty of excise leviable thereon by any other notification (not being a notification where exemption from the whole of the duty of excise leviable thereon is granted based upon the value or quantity of clearances made in a financial year) issued under sub-rule (1) of rule 8 of the said Rules, 1944, shall not be taken into account." 23. It is well settled that a notification has to be read as a whole and in the event of any ambiguity a harmonious interpretation which gives effect to all the parts of the notification and does not render any part thereof futile has to be adopted. 24. The said Explanation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which are also specified goods, the clearance of such inputs for such use shall not be taken into account for the purposes of calculating the aggregate value of clearances under this notification. There appears to be a rationale behind this Explanation; firstly, when the value of the finished goods, which are exempted under different notifications, is to be excluded, having regard to the wording of Explanation II, on the same analogy, the value of inputs which are being used for manufacture of finished goods are also excluded as both are specified goods, subject, of course, to the limit of the notification. Secondly, the notification provides relief to small scale industries; when the inputs which enjoys the exemption under the notificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r is the input for the manufacture of envelopes. Thus, Explanation VI to Notification No. 1/93 squarely applies to the facts of this case. In other words, by virtue of this Explanation in calculating the aggregate value, value of the input, namely, reinforced paper should be excluded. 5. The adjudicating authority in paragraph 9 of the order admits that the reinforced paper is used captively by the appellant in the manufacture of the final product, namely, the envelopes. He further proceeded to state that the value should not be included in the value of the clearances. But the authority takes the view that it is not to be completely exempted in assessing the aggregate value as per the notification. According to the adjudicating author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above stated position was settled by various decisions of the Tribunal. Reference may be made to Universal Electrical Industries v. CCE, 1994 (70) E.L.T. 279, J.G. Engineers v. CCE, 1994 (74) E.L.T. 942 and CCE v. Gadgets India Ltd., 1994 (71) E.L.T. 835. The adjudicating authority has ignored the law laid down by the Tribunal in the above mentioned cases while passing the impugned order." 9. In the present case, the final product Wick Stove and the parts thereof are notified as specified goods under small scale exemption Notification No. 1/93-C.E., dated 1-3-1993. In view of the Explanation VI of the said notification, clearance value of the parts of Wick Stove used in the manufacture of Wick Stove shall not be taken into account for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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