Commissioner of C. Ex. Vs. New Sandhu Metal Works - Court Judgment

Excerpt:
1. the issue involved in this appeal filed by revenue, is whether the benefit of notification no. 6/2000-c.e., dated 2-6-98 is available to the brass sheets manufacture by m/s. new sandhu metal works.2. shri o.p. arora, learned senior departmental representative, submitted that serial no. 198 of notification no. 6/2000-c.e. is available to "all goods other than trimmed or untrimmed sheets or circles of copper, intended for use in the manufacture of utensils or handicrafts." falling under heading no. 74.09 of the schedule to the central excise tariff act; that this serial no. provides exemption only for goods intended for use in the manufacture of handicrafts or utensils other than trimmed or untrimmed sheets or circles of copper; that serial no. 199 prescribes rate of duty for trimmed or untrimmed sheets or circles of copper, intended for use in the manufacture of utensils or handicrafts"; that a plain reading of serial no. 199 reveals that it covers "all the goods other than trimmed or untrimmed sheets or circles of copper"; but its extension has been limited by the defining clause separated by comma that is "intended for use in the manufacture of utensils or handicrafts"; thus the said serial no. 198 provides exemption only for goods other than trimmed or untrimmed sheets or circles, intended for use in the manufacture of handicrafts or utensils; that in the present case the respondents are engaged in the manufacture of goods for use in the manufacture of electrical goods; that if the interpretation given by the commissioner (appeals) is accepted, it would mean that all goods of heading 74.09 minus trimmed or untrimmed sheets or circles of copper intended for use in the manufacture of utensils or handicrafts will attract nil rate of duty; that this is not the case as serial no. 197 provides nil rate of duty for copper strap and foil intended to be used for manufacture of imitation "zari". the learned senior departmental representative also relied upon the decision in the case of cce, delhi-iii v. overseas trading corporation.,(t) and cce, jaipur-11 v.mewar bartan nirman udyog, 3. on the other hand, shri k.k. anand, learned advocate, submitted that the respondents are eligible to avail the benefit of the notification since the sheets manufactured by them were not intended for use in the manufacture of utensils or handicrafts and were intended for use in the manufacture of electrical goods; that this is evident from serial no.199 of notification no. 6/2000-c.e., which provides concessional rate in respect of trimmed or untrimmed sheets or circles of copper, intended for use in the manufacture of handicrafts and utensils; that as serial no. 198 provides nil rate of duty in respect of all goods falling under heading no. 74.09, the goods mentioned in serial no. 199 have been excluded from the purview of serial no. 198. alternatively the learned advocate mentioned that if it is held that the benefit of serial no. 198 is not available to them; the price should be considered as cum-duty price and the assessable value has to be redetermined in terms of the decision in the case of cce, delhi v. maruti udyog ltd. - 2002 (141) e.l.t. 3 (s.c.), that no penalty is also imposable as the issue pertains to interpretation of exemption notification.4. we have considered the submissions of both the sides. serial nos.198 and 199 of notification no. 6/2000-c.e., dated 1-3-2000 reads as under : all goods other than trimmed or untrimmed sheets of circles of copper, intended for use in the manufacture of handicrafts and utensils trimmed or untrimmed sheets or circles of copper, intended for use in the manufacture of handicrafts or utensils a perusal of these two serial nos. reveals that the serial no. 198 excludes from its purview the goods which are covered by serial no. 199 of the notification. it means that serial number 198 exempts all goods falling under heading no. 74.09 of the tariff other than "trimmed or untrimmed sheets or circles of copper, intended for use in the manufacture of handicrafts or utensils" as the said products are chargeable to central excise duty at the rate of rs. 3,500/- per metric tonne. the contention of the revenue that serial no. 198 provides exemption only for goods intended for use in the manufacture of handicrafts and utensils other than trimmed or untrimmed sheets or circles of copper is not acceptable. the comma used in serial no. 198 does not restrict the expression "all goods" as it only signifies the use of excluded goods i.e. trimmed or untrimmed sheets or circles. this view is strengthened from serial no. 199 of the notification wherein a concessional rate of duty has been provided in respect of "trimmed or untrimmed sheets or circles of copper, intended for use in the manufacture of handicrafts or utensils". the mere fact that serial no.197 of the notification exempts copper strip and foil falling under heading no. 74.09 to be used for manufacture of imitation zari will not have effect in interpreting the serial no. 198 of the notification which applies to all goods falling under heading no. 74.09 except the excluded goods. the law maker has specifically provided a separate serial number in the notification for copper strip and foil intended to be used for manufacture of imitation zari as there is no condition attached for availing the said exemption whereas for availing the benefit of exemption provided under serial no. 198 condition (no. 33) specified in the notification has to be complied with. this condition reads as under : "if such goods are not produced or manufactured by a manufacturer who produces or manufactures copper from copper ore or copper concentrate." this condition does not apply to goods exempted under serial number 197 of the notification. we, therefore, reject the appeal filed by the revenue.

Judgment:
1. The issue involved in this Appeal filed by Revenue, is whether the benefit of Notification No. 6/2000-C.E., dated 2-6-98 is available to the brass sheets manufacture by M/s. New Sandhu Metal Works.

2. Shri O.P. Arora, learned Senior Departmental Representative, submitted that Serial No. 198 of Notification No. 6/2000-C.E. is available to "All goods other than trimmed or untrimmed sheets or circles of copper, intended for use in the manufacture of utensils or handicrafts." falling under Heading No. 74.09 of the Schedule to the Central Excise Tariff Act; that this Serial No. provides exemption only for goods intended for use in the manufacture of handicrafts or utensils other than trimmed or untrimmed sheets or circles of copper; that Serial No. 199 prescribes rate of duty for trimmed or untrimmed sheets or circles of copper, intended for use in the manufacture of utensils or handicrafts"; that a plain reading of Serial No. 199 reveals that it covers "all the goods other than trimmed or untrimmed sheets or circles of copper"; but its extension has been limited by the defining clause separated by comma that is "intended for use in the manufacture of utensils or handicrafts"; thus the said Serial No. 198 provides exemption only for goods other than trimmed or untrimmed sheets or circles, intended for use in the manufacture of handicrafts or utensils; that in the present case the respondents are engaged in the manufacture of goods for use in the manufacture of electrical goods; that if the interpretation given by the Commissioner (Appeals) is accepted, it would mean that all goods of Heading 74.09 minus trimmed or untrimmed sheets or circles of copper intended for use in the manufacture of utensils or handicrafts will attract nil rate of duty; that this is not the case as Serial No. 197 provides Nil rate of duty for copper strap and foil intended to be used for manufacture of imitation "Zari". The learned Senior Departmental Representative also relied upon the decision in the case of CCE, Delhi-III v. Overseas Trading Corporation.,(T) and CCE, Jaipur-11 v.Mewar Bartan Nirman Udyog, 3. On the other hand, Shri K.K. Anand, learned Advocate, submitted that the respondents are eligible to avail the benefit of the notification since the sheets manufactured by them were not intended for use in the manufacture of utensils or handicrafts and were intended for use in the manufacture of electrical goods; that this is evident from Serial No.199 of Notification No. 6/2000-C.E., which provides concessional rate in respect of trimmed or untrimmed sheets or circles of copper, intended for use in the manufacture of handicrafts and utensils; that as Serial No. 198 provides nil rate of duty in respect of all goods falling under Heading No. 74.09, the goods mentioned in Serial No. 199 have been excluded from the purview of Serial No. 198. Alternatively the learned Advocate mentioned that if it is held that the benefit of Serial No. 198 is not available to them; the price should be considered as cum-duty price and the assessable value has to be redetermined in terms of the decision in the case of CCE, Delhi v. Maruti Udyog Ltd. - 2002 (141) E.L.T. 3 (S.C.), that no penalty is also imposable as the issue pertains to interpretation of exemption notification.

4. We have considered the submissions of both the sides. Serial Nos.

198 and 199 of Notification No. 6/2000-C.E., dated 1-3-2000 reads as under : All goods other than trimmed or untrimmed sheets of circles of copper, intended for use in the manufacture of handicrafts and utensils Trimmed or untrimmed sheets or circles of copper, intended for use in the manufacture of handicrafts or utensils A perusal of these two serial Nos. reveals that the Serial No. 198 excludes from its purview the goods which are covered by Serial No. 199 of the Notification. It means that serial Number 198 exempts all goods falling under Heading No. 74.09 of the Tariff other than "trimmed or untrimmed sheets or circles of copper, intended for use in the manufacture of handicrafts or utensils" as the said products are chargeable to Central Excise duty at the rate of Rs. 3,500/- per metric tonne. The contention of the Revenue that Serial No. 198 provides exemption only for goods intended for use in the manufacture of handicrafts and utensils other than trimmed or untrimmed sheets or circles of copper is not acceptable. The comma used in Serial No. 198 does not restrict the expression "all goods" as it only signifies the use of excluded goods i.e. trimmed or untrimmed sheets or circles. This view is strengthened from Serial No. 199 of the notification wherein a concessional rate of duty has been provided in respect of "trimmed or untrimmed sheets or circles of copper, intended for use in the manufacture of handicrafts or utensils". The mere fact that Serial No.197 of the notification exempts copper strip and foil falling under Heading No. 74.09 to be used for manufacture of imitation Zari will not have effect in interpreting the Serial No. 198 of the Notification which applies to all goods falling under Heading No. 74.09 except the excluded goods. The law maker has specifically provided a separate serial number in the notification for copper strip and foil intended to be used for manufacture of imitation Zari as there is no condition attached for availing the said exemption whereas for availing the benefit of exemption provided under Serial No. 198 condition (No. 33) specified in the notification has to be complied with. This condition reads as under : "If such goods are not produced or manufactured by a manufacturer who produces or manufactures copper from copper ore or copper concentrate." This condition does not apply to goods exempted under Serial Number 197 of the notification. We, therefore, reject the Appeal filed by the Revenue.