Customs, Excise and Gold Tribunal - Delhi
Coir Cushion P. Ltd. vs Collector Of Central Excise on 16 February, 1999
Equivalent citations: 1999ECR181(TRI.-DELHI), 1999(108)ELT432(TRI-DEL)
ORDER V.K. Agrawal, Member (T)
1. In these two appeals arising out of a common order-in-original dated 14-2-1995, the issue involved is whether the benefit of Notification No. 115/75-C.E., dated 30-4-1975 is available in respect of latex mix manufactured by M/s. Coir Cushion Pvt. Ltd.
2. Briefly stated the facts are that M/s. Coir Cushions Pvt. Ltd. manufactured Coir product, such as rubberised coir mattresses, cushions, etc., from latex, coir fibre, accelerator and baking agents. They were manufacturing latex mix which was used captively by them without payment of central excise duty. This latex mix was sprayed on the coir fibre sheets which got rubberised by this process. The Collector Central Excise, under the impugned order, confirmed the demand of central excise duty amounting to Rs. 97,61,324/- and imposed penalty of Rs. 5 lakh on the appellant company and penalty of Rs. 25,000/- on Shri M.K. Agarwal, Managing Director of the appellant company, holding that latex mix was nothing but compounded rubber classifiable under Heading 40.05 of the Schedule to the Central Excise Tariff Act; that exemption under Notification No. 115/75 is not available as the exemption is available to products whose raw material is coir; that latex mix is not exempted from payment of duty as it is altogether different from coir product; that this is clear from the fact that the unit has been registered with the Rubber Board as a Rubber Unit and paying cess on the rubber used by them in the manufacture of latex mix; that the fact of manufacture of latex mix was suppressed from the department and accordingly extended period for issuing demand under Section 11A had been rightly invoked; that Shri M.K. Agrawal was concerned with manufacturing processing, keeping & dealing with the compounded rubber and was liable to penalty under Rule 209A of the Central Excise Rules.
3. Shri V. Lakshmi Kumaran, learned Advocate, submitted that Notification No. 115/75, dated 30-4-1975 provided exemption from payment of duty to goods falling under the schedule to the Central Excise Tariff Act and manufactured in factories covered by any of the industries specified in the schedule annexed to the Notification; that one of the industries mentioned in the schedule was coir industry; that it is not disputed by the Revenue that the appellants are not coir industry; that they are registered with the Coir Board and have been granted a certificate of registration by the Coir Board in terms of the Coir Industry (Registration & Licensing) Rules, 1958. He, further, submitted that irrespective of the classification of the product manufactured by many of the industries mentioned in the Schedule to the Notification, the benefit of exemption from payment of duty will be available as the notification grants exemption to all goods falling in the Tariff and manufactured in Coir Industry. He relied upon the decision in the case of Bombay Oil Industries Ltd. v. C.C.E., 1997 (91) E.L.T. 538 (S.C.) and C.C.E., Baroda v. Jayant Oil Mills, Order No. 36/98-C, dated 16-1-98. The Appellate Tribunal in Jayant Oil Mills case extended the benefit of Notification No. 115/75 in respect of goods such as Glycerol, Heptaldehyde, Zinc Undecylonate as these were manufactured in an oil mill and solvent extraction industry. He also referred to the explanatory Notes of Budget 1988 in which Notification No. 115/75 was amended by Notification No. 127/88. It was mentioned therein that "Notification No. 115/75-Central Excise, dated the 30th April 1975 (sic) is amended to remove certain interpretational difficulties. By the amendment it is made clear that the notification will apply to all excisable goods other than those of Heading Nos. 15.03 and 15.04 manufactured by the industries specified in the Notification. He finally referred to Board's Circular No. 9/88-CX. 3, dated 4-5-1988 in which it was clarified that 'Notification No. 127/88-C.E., dated 1-3-1988 is only of a clarificatory nature and may not be interpreted as having extended the scope of Notification No. 115/75-C.E., dated 1-3-1975. Notification No. 115/75-C.E., dated 1-3-1975, as amended, can, therefore, be said to have always contained an exemption to all excisable goods, except vegetable oil (15.03) and vegetable products (15.04), produced by the Industries specified in the said Notification."
4. Shri Satnam Singh, learned SDR, reiterated the findings of the Collector contained in the impugned order and emphasized that latex mix is a product of rubber industry which was not specified as one of the industries in the Notification and accordingly the benefit of Notification No. 115/75 was not available to latex mix.
5. We have considered the submissions of both sides. The Notification No. 115/75-C.E., dated 1-3-1975 as amended reads as under :
"In exercise of the power conferred by Sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts goods (other than fixed vegetable oils of Heading No. 15.03; vegetable fats and oils of Heading 15.04) falling under the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), and manufactured in factories covered by any of the industries specified in the schedule hereto annexed, from the whole of the duty of excise leviable thereon.
The Schedule
1. Coir Industry,
2. Cashew Industry,
3. Tanning Industry,
4. Oil Mill and Solvent Extraction Industry,
5. Rice Milling Industry."
6. It is apparent from the wordings of the Notification that all excisable goods, except the goods mentioned in the notification itself, falling in the schedule to the Central Excise Tariff Act are exempted from the payment of duty if manufactured in any of the industries specified therein. It has not been disputed by Revenue that the appellants are Coir Industry which is specified as one of the industries in the notification and accordingly any goods manufactured by them will be eligible for exemption from payment of duty by virtue of the language of the notification. The Apex Court had the occasion to interpret this notification in the case of Bombay Oil Industries Ltd., 1997 (91) E.L.T. 538 (S.C.) wherein the benefit of Notification was given to Oleoresins used in the food industries for flavouring and colouring.
The Supreme Court held as under :
"It may that ordinarily an industry of the nature (Oil mill and solvent extraction industry) would have both an oil mill and a solvent extraction plant both of which manufacture vegetable oils, but that is no reason, in our view, to place upon the plain words of the notification a narrower meaning than that to which they plainly lend themselves. The notification exempts goods manufactured in factories of the oil mill and the solvent extraction industry. The appellants' goods are goods manufactured in a solvent extraction plant and must on the plain words of the notification, receive the benefit of the exemption that it confers."
7. This judgment was followed by the Tribunal in the case of C.C.E., Baroda v. Jayant Oil Mills, supra. Following the ratio of these decisions we hold that the appellants were eligible to avail the exemption from payment of excise duty in respect of latex mix manufactured by them. Accordingly, both the appeals are allowed.