Customs, Excise and Gold Tribunal - Ahmedabad
Commissioner Of C. Ex. vs R.N. Agarwal Industries Ltd. on 15 February, 2007
ORDER Archana Wadhwa, Member (J)
1. After rejecting the stay petition filed by the Revenue we proceed to decide the appeal itself.
2. After hearing both sides we find that the respondents are engaged in the manufacture of news-print. They claimed classification of the same under Heading 4801.00, which prescribe nil rate of duty. However, the Respondents paid duty in respect of certain clearances of the said news-print and availed the benefit of Modvat credit in respect of capital goods. Proceedings were initiated against them alleging that inasmuch as news-print attracts nil rate of duty assessee's action to clear the goods on payment of duty and thus availing the benefit of Modvat credit, was not proper and legal. Accordingly, Revenue's sought to deny the benefit of Modvat credit availed by the assessee in respect of capital goods. The same was confirmed by the lower adjudicating authority but set aside by the Commissioner (Appeals) vide his impugned order. The said order is under challenge by the Revenue.
3. Heading 4801.00 describe the goods - "Newsprint in rolls or sheet", attracting nil tariff rate. Chapter Note 3 of Chapter 48 defines 'newsprint' as newsprint defined by the Central Government by Notification published in official gazette. Notification No. 23/98-C.E., dated 1-8-98 defines newsprint for the purpose of Chapter 48 as under:
In exercise of the power conferred by Note 3 to Chapter 48 of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), the Central Government, hereby defines 'newsprint' for the purposes of the said Chapter 48, as paper of a kind, -
(a) intended for the printing of newspapers; and
(b) manufactured by a manufacturer of newsprint specified under Schedule I of the Newsprint Control Order, 1962, and supplied against a purchase order placed upon such manufacturer by a newspaper which is registered by the Registrar of News-papers for India under the provisions of the Press and Registration of Books Act, 1987 (25 of 1867).
4. According to the assessee they are supplying a part of their production to their customers, who are not registered by the Registrar of Newspaper of India under the provisions of Press and Registration of Books act, 1987. As such it is their contention that they do not satisfy the said condition of definition of newsprint as prescribed in Notification No. 23/98-Cus., dated 1-8-98 read with Chapter Note 3 to Chapter 48, their clearances to such customers cannot be held to be clearances of newsprint. As such tariff rate of nil duty was not applicable to them in respect of such clearances. Duty, as such has been correctly paid by them @ 8% in terms of Notification No. 6/2003. The said stand of the assessee stands accepted by the Commissioner (Appeals).
5. Revenue in their memo of appeal have not contested the above factual position that the disputed clearances were made to non-registered customers. If that be so, such clearances cannot be held to be clearances of newsprint. As such nil rate would not be applicable on the same. As such the assessee having paid the duty on part of their final product would get entitled to the Modvat credit of duty paid on the capital goods. No infirmity can be found in the order of the Commissioner (Appeals). Accordingly, appeal filed by the Revenue is rejected. Stay petition is also disposed of.
(Dictated & pronounced in the Open Court.)