2014 (10) TMI 305 - AT - Central Excise

Appellate Tribunal rules against concessional duty rate for pasted paperboards pre-2011

M/s. Nithya Packing Pvt. Ltd. Versus Commissioner of Central Excise, Puducherry

The Appellate Tribunal CESTAT CHENNAI held that the applicant was not entitled to the concessional rate of duty on Corrugated Paper or Paperboards pasted ... Waiver of pre-deposit of duty - Notification No.4/2006-CE, dated 01.03.2006 as amended by Notification No.10/2010-C.E., dated 27.10.2010 - Concessional rate of duty - Held that:- vide Circular No.60/95, dated 4th June, 1995 and Circular No.9/96-Cus., date 313.02.1996, it has been clarified that the benefit of exemption will be available to goods where the goods are squarely covered by the description even though the goods mentioned in the notification are not covered by the Chapter/Heading Nos./Sub-heading Nos. mentioned in the notification or if the Heading No. indicated against the description is ‘incorrect’. Board has clarified that the benefit of Notification would be extended on the basis of the description of the goods as mentioned in the Notification even though the goods mentioned in the Notification are not covered by Chapter/Heading Nos. mentioned in the notification. Prima facie, we find that in this case amended Notification No.4/2011-CE (supra) extended benefit of concessional rate of duty to the impugned goods, and the Boards clarification would not help the case of the applicant - Assessee directed to make pre deposit - Partial stay granted. Issues:1. Eligibility for concessional rate of duty on corrugated paper or paperboards pasted with duplex sheets.2. Interpretation of Notification No.4/2011-CE and Board's clarification.3. Requirement of pre-deposit of duty.Eligibility for Concessional Rate of Duty:The applicant sought waiver of pre-deposit of duty for Unit-I and Unit-II regarding the manufacture of 'Corrugated Box' under Heading No.4819 1010 of the CETA, 1985. The issue revolved around the eligibility of the applicant to avail the concessional rate of duty on Corrugated Paper or Paperboards pasted with duplex sheets on the outer surface. The Revenue argued that post the amendment by Notification No.4/2011-CE, the applicant was not entitled to the concessional rate before 01.03.2011. However, the applicant relied on a Board's clarification stating that the concessional rate would apply even before the amendment. The Tribunal analyzed the Board's clarification and held that the amended Notification extended the benefit to the goods in question, thus rejecting the applicant's contention.Interpretation of Notification and Board's Clarification:The Tribunal delved into the interpretation of Notification No.4/2011-CE and the Board's clarification to determine the applicability of the concessional rate of duty. The Board's clarification emphasized that the benefit of the Notification would be based on the goods' description mentioned, even if not covered by specific Chapter/Heading Nos. mentioned in the notification. While the applicant argued in favor of eligibility based on the Board's clarification, the Tribunal found that the amended Notification itself provided for the concessional rate to the goods in question. Therefore, the Tribunal concluded that the Board's clarification did not support the applicant's case, leading to the direction for pre-deposit of a specified amount.Requirement of Pre-deposit of Duty:In the final decision, the Tribunal directed the applicant to make a pre-deposit of a specific sum for each unit within a stipulated period. Upon compliance with the pre-deposit amount, the balance duty along with interest and penalty would be waived, and the recovery stayed until the appeal's disposal. The Tribunal set a deadline for compliance and emphasized the importance of adhering to the pre-deposit requirement for further proceedings in the case.This detailed analysis of the judgment addresses the issues of eligibility for concessional rate of duty, the interpretation of relevant notifications and clarifications, and the requirement of pre-deposit of duty as decided by the Appellate Tribunal CESTAT CHENNAI.