2000 (7) TMI 142 - AT - Central Excise

Company entitled to concessional duty rate for acrylic staple fibre waste under Notification 85/95-CE.

COLLECTOR OF C. EX., CHANDIGARH Versus INDIAN ACRYLIC LTD.

COLLECTOR OF C. EX., CHANDIGARH Versus INDIAN ACRYLIC LTD. - 2000 (122) E.L.T. 477 (Tribunal) Issues:Classification of acrylic staple fibre waste for concessional rate of duty under Notification 85/95-CE.Analysis:The case involved the classification of acrylic staple fibre waste by a company registered with the Central Excise Department for concessional rate of duty under Notification 85/95-CE. The company claimed the benefit of the notification, which provided partial exemption to waste of man-made staple fibre and man-made filament yarn. The dispute arose when Central Excise Officers found that the company was engaged in the manufacture of acrylic fibre waste through the process of polymerisation of organic polymers, which was contrary to the conditions specified in the notification. A show cause notice was issued alleging fraudulent availment of the benefit, demanding a differential duty and proposing interest and penalty. The matter was referred to the Chief Chemist of CRCL, who opined that the process undertaken by the company was polymerisation of monomers, not polymers. The Commissioner held that the company had correctly availed of the benefit under the notification based on a strict interpretation of the language of the notification, dropping the demand.The Revenue challenged the Commissioner's decision, arguing that the intention and spirit of the notification should be considered, not just a literal interpretation. They contended that the language of the notification made certain parts redundant and meaningless if interpreted strictly. The Revenue sought to substitute the expression 'polymerisation of organic monomers' for 'polymerisation of organic polymers' in the notification. However, the Tribunal, relying on the Supreme Court judgment, held that there is no room for intendment in a taxing statute, and exemptions must be construed strictly based on the language used. Since the company did not carry out the process of polymerisation of organic polymers, they were deemed eligible for the concessional rate of duty under the notification.The Tribunal also addressed the Revenue's allegation of fraudulent misdeclaration by the company. The Commissioner had found that the company had correctly stated in their classification list that they were not polymerising organic polymers, leading to the rejection of the fraudulent misdeclaration charge. The Tribunal upheld this finding and confirmed the Commissioner's order, rejecting the Revenue's appeal.