Entitlement to more beneficial exemption to the assessee

PJ/Case Laws/2010-11/1164

Case: - M/s Karanja Industries Bidar v/s Commissioner of Central Excise, Belgaum

Citation: - 2010-TIOL-100-CESTAT-BANG

Issue:- Whether benefit of lesser amount of duty under Sl. No. 86A of Notification No. 48/2004 is available when assessee has previously availed benefit under Sl. No. 86 of said Notification?

Brief Facts:- Appellants during the year 2004-05 had availed concessional rate of duty @ 8% as stated in Sl. no. 86 of the Notification No. 6/2002-CE dated 1.3.2002 for the clearance of Kraft paper and thereafter paid duty @ 16% upto 9.9.2004. From 10.9.2004 onwards appellant started paying duty @ 12% by availing benefit of Sl. no. 86A read with condition no. 14A of Notification No. 6/2002-CE which was introduced by Notification No. 48/2004 dated 10.9.2004.

Departmental was of the view that the appellant were not entitled to avail the benefit of Sl. no. 86A as they have already availed the benefit under Sl. no. 86. Show cause notice was issued demanding deferential duty.

The Adjudicating Authority confirmed the demand with interest and imposed penalties under Section 11AC. In appeal, the Commissioner (Appeal) upheld the impugned order but set aside the penalty imposed by the Adjudicating Authority.

Appellant have filed further appeal before the Tribunal.

Appellant’s Contention:- Appellant relied upon the entries in Sl No. 86 and 86A of the Notification No. 6/2002 and contended that there is no dispute that the appellants have fulfilled the conditions stipulated in the said entries. It was submitted that the benefit of exemption of duty under Sl. no. 86A of the said Notification has been sought to be denied by Revenue only on the ground that the appellant had availed the benefit under Sl. no. 86. It was further submitted that the conditions. 14 and 14A did not predict any such restriction.

Appellant also submitted that the issue is squarely covered by decision of High Court in West Coast Paper Mills Ltd v/s Union of India [2007 (212) ELT 305 (Kar.)].

Respondent’s Contention:- Revenue argued that once the appellant has availed the benefit of exemption under Sl. No. 86 of the Notification No. 6/2002, which would apply to the first clearance upto 3500 MTs of kraft paper, the appellant would not be entitled for any other benefit of exemption as once the exemption has been availed, there will be no exemption available to them. Further they submitted that condition 14 may be met by the appellant, for the first clearance of 3500 MTs of paper and paperboard or articles made therefrom.

Reasoning of Judgment:- The Tribunal held that from a perusal of conditions specified under the Sl. no. 86 & 86A it is clear that benefit of these entries can be availed by the assessee if he fulfils the conditions as mentioned. In case of fulfilment of conditions, the Tribunal held that the appellant claim for the benefit of lesser rate of duty of 12% as mentioned under Sl. no. 86A of the Notification no. 6/2002, cannot be denied by the Revenue as conditions no. 14A does not put any restriction on the availment of such benefit if the assessee had availed the benefit under Sl. no. 86. The only condition prescribed was that the assessee should not avail the SSI benefits as indicated in Notification No. 8/2003 and/or 9/2003, which was not the case in this appeal. Relying upon the judgment in West Coast Paper Mills Ltd v/s Union of India and the provisions of the notification, impugned orders are not sustainable and therefore set aside.

Decision:- Appeal allowed with consequential relief.

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PJ/Case Laws/2010-11/1164

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