Customs, Excise and Gold Tribunal - Tamil Nadu
Cce vs Saravana Insulators Ltd. on 25 January, 2006
Equivalent citations: 2006(106)ECC425, 2006ECR425(TRI.-CHENNAI), 2006(199)ELT551(TRI-CHENNAI)
ORDER P.G. Chacko, Member (J)
1. We are taking up this appeal pursuant to the Hon'ble High Court's direction contained in judgment dated 29-11-05 in W.A. No. 3145 of 2004.
2. The respondents in August 2003, applied for, and obtained, Central Excise registration for the manufacture of "Electric Insulators". Subsequently, in a letter dated 30-10-03, they informed the department that they intended to import 'Ball Clay' at concessional rate of duty in terms of Sl. No. 158 of the Table annexed to Notification No. 25/99-Cus. dated 28.2.99 (as amended) for the manufacture of 'high tension porcelain insulators'. In the same letter, they requested for registration under the Customs (import of goods at concessional rate of duty for the manufacture of excisable goods) Rules, 1996. This request was turned down by the original authority holding that the Notification allowed concessional rate of duty to "Ball Clay" if only it was used for the manufacture of 'ceramic cores'. Even though that authority agreed that "porcelain insulator" could also be called "ceramic insulator", it took the definite view that "ceramic insulator" to be manufactured by the assessee was not known in the market as "ceramic core". The decision of the original authority was reversed by the first appellate authority, which took the view that as the imported 'Ball Clay' was used in the manufacture of "ceramic cores" which were captively consumed in the manufacture of "ceramic insulators", the assessee was entitled to the benefit of concession under Sl.No.158 ibid. Hence the present appeal of the Revenue.
3. After examining the records, we notice that, though the specific prayer in the appeal memorandum is to set aside the Order-in-Appeal, some of the grounds of the appeal constitute a cumulative challenge to both the O1O and the OIA. Grounds 2 &3 are in this category. However, after hearing ld. SDR, we find that these grounds are not pressed. Ld. SDR has reiterated the remaining grounds [nos. 1&4] of the appeal. Ld. counsel for the respondents has argued in support of the impugned order.
4. After giving careful consideration to the submissions, we find that the question to be considered is whether the benefit of concessional rate of duty is admissible to the respondents, in terms of Sl. No. 158 of the Table annexed to the aforesaid Notification, in respect of "Ball Clay" which was imported by them for the purpose of manufacturing 'porcelain insulators'. The relevant entry reads as under :
S. No Chapter Description of Description of
Imported goods finished goods
(1) (2) (3) (4)
...
158 25 Ball Clay Ceramic
Cores/Substrates
for resistors
...
It is on record that the registration obtained by the assessee in August 2003 was for the manufacture of "porcelain insulators". They have had no case that they were manufacturing, or had intention to manufacture, "resistors", nor have they ever claimed that "resistors" are the same as "insulators". For the benefit of concession under the above entry, the imported 'Ball Clay' should have been intended to be used in the manufacture of 'ceramic cores/substrates for resistors'. The benefit would be available, where the imported material was to be used in the manufacture of 'ceramic cores/substrates for insulators'. The word "insulators" cannot be substituted for the word "resistors" in Column No. 4 of the Notification inasmuch as an Exemption Notification has to be strictly construed as held, time and again, by the Hon'ble Supreme Court. The meaning of an entry in such a Notification should be gathered from the plain language thereof. As rightly pointed out by ld. SDR, this is the legal position laid down by the Hon'ble Supreme Court in the case of Gujarat State Fertilizers Company v. CCE . Hence "ceramic cores/substrates for resistors" cannot be construed so as to mean "ceramic cores/substrates for insulators". As the respondents have not claimed that any ceramic core or substrate manufactured out of the imported 'Ball Clay' was to be captively consumed in the manufacture of resistor, they cannot claim the benefit of the above entry.
5. In the result, the department's challenge against the impugned order to the extent pressed before us has to be sustained. It is ordered accordingly and the impugned order is set aside. The appeal succeeds.
(operative part of the order was pronounced in court on 25.1.2006)