Customs, Excise and Gold Tribunal - Delhi
Classic Enterprises Ltd. vs Cce on 12 January, 2004
Equivalent citations: 2004(94)ECC572, 2004(177)ELT548(TRI-DEL)
ORDER V.K. Agrawal, Member (T)
1. In this Appeal filed by M/s. Classic Enterprises Ltd., the issue involved is whether the value of clearance of crates manufactured by them is to be included in the aggregate value of clearance of exempted products.
2. Shri Rajesh Chibber, learned Advocate, submitted that the Appellants manufactured flexible plastic hollow corrugated sheets falling under Heading 39.26 and boxes, cartons, dispensers, file folders, book case coasters, crates etc. falling under Heading No. 39.23 of the Schedule to the Central Excise Tariff Act; that Notification No. 5/99-CE dated 22.8.99 S.No. 70, exempts them from payment of duty on the aggregate value of clearances up to Rs. 85 lakhs/100 lakhs and also provides partial exemption in respect of aggregate value of clearance exceeding Rs. 85 lakhs/100 lakhs in respect of all goods falling under Heading Nos. 39.23, 39.24 and 39.26, other than (i) goods of polyurethanes, (ii) insulated ware (iii) bags or sacks, and (iv) crates; that Explanation to S. No. 70 of the Notification provides that any clearance for exports or any clearance of goods exempted from duty or chargeable to nil rate of duty shall not be included in computing the aggregate value of clearances; that the Revenue has included the value of crates in the aggregate value of clearance for the purpose of Notification No. 5/99 on the ground that the Explanation to Notification (S.No. 70) does not exclude the value of clearances of crates. He further, submitted that aggregate value up to which exemption is granted is available in respect of all goods eligible for exemption; that the purpose of Legislature in providing the Explanation was to keep out the value of goods which were otherwise exempted from duty from the aggregate value of clearance; that it was not the purpose of Explanation that the value of clearance of other goods not covered by exemption shall be considered in computing the aggregate value of clearances. He relied upon the decision in the case of Ballarpur Industries Ltd. v. CCE, New Delhi, 2003 (151) ELT 555 (Tri) and Arpee Electricals Pvt. Ltd. v. CCE, Bangalore, 2001 (45) RLT 549 CEGAT.
3. Countering the argument Shri O.P. Arora, learned Senior Departmental Representative, submitted that the Explanation to Notification No. 5/99 (S.No. 70) only excludes the clearance for export or any clearance of goods exempted from duty while computing the aggregate value of clearance; that the value of any other goods which is manufactured and cleared by the appellants is thus to be included in computing the aggregate value of clearance.
4. We have considered the submissions of both the sides. S.No. 70 of Notification No. 5/99 provides exemption in respect of all goods falling under Tariff Heading 39.23, 39.24 and 39.26 except the goods of Polyurethanes, insulated ware, bags or sacks and crates. It is, thus apparent that the Notification itself excludes crates from the purview of Notification. The Notification further provides nil rate of duty on aggregate value of clearance up to 85 lakhs/100 lakhs and thereafter 8% duty on aggregate value of duty exceeding Rs. 85 lakhs/100 lakhs. The exemption, as we have seen, is confined to all goods other than four varieties of goods mentioned in the Notification, that the crates is one of the commodity already excluded from the purview of the Notification. Once the crates is excluded from the purview of the Notification itself, its value of clearance is not to be included in computing the aggregate value of clearance. We agree with the learned Advocate that the Explanation excludes the value of clearance of the goods which are covered by the Notification and are exported or are otherwise exempted from duty or chargeable to nil rate of duty. The explanation does not bring the excluded items within the purview of the Notification. This was the view taken by the Appellate Tribunal in the case of Ballarpur Industries Ltd. while considering S. No. 77 of Notification No. 6/2000 which provided exemption in respect of "Paper and Paper Board or articles made therefrom." The Tribunal has held that the exemption was in respect of only certain varieties of papers and do not cover other varieties of paper and there was no warrant to take any other varieties of paper while computing first clearance of an aggregate quantity not exceeding 3500 MT. The Tribunal observed that "if the exemption is read as applicable to the clearance of all varieties of paper, it yield all unintended results. Either excluded varieties of paper also get the benefit of exemption on the ground that they were the "first clearances" or the included varieties are denied the exemption (as in the present case) merely on the ground that they were not cleared first. Such a reading of a notification which makes it unworkable is to be avoided." We therefore, set aside the impugned order and allow the Appeal.