Exemption for hot rolled Pattis and Pattas upheld where no process beyond the cold rolling stage was carried out.

Pattis and Pattas cleared after hot rolling remained eligible for exemption under the relevant excise notification because the exemption turned on processes up to, but not beyond, the cold rolling stage. Departmental clarification and prior Tribunal reasoning supported that construction, so the duty demand could not be sustained. As the principal demand failed, the consequential penalty also could not survive.

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Issues: Whether Pattis and Pattas are eligible for exemption under Notification No. 3/2005-CE as amended by Notification No. 12/2012-CE at Serial No. 203, when no process other than hot rolling is carried out, and whether the consequential demand and penalties can be sustained.

Analysis: The exemption entry applies to Pattis and Pattas when subjected to any process other than cold rolling. The Board's clarification and the Tribunal's earlier decision on an identical question recognised that all processes prior to cold rolling are covered by the exemption and that hot rolled Pattis and Pattas do not lose the benefit merely because no further processing is done. The same reasoning was applied here, making the demand unsustainable. Once the principal demand fails, the consequential penalty also cannot survive.

Conclusion: The assessee is entitled to the exemption, and the demand and penalties were not sustainable.

Final Conclusion: The assessee's appeals succeeded and the Revenue's appeal failed, with the impugned order being set aside to that extent.

Ratio Decidendi: Goods falling within an exemption entry framed by reference to stages prior to cold rolling remain exempt if they are cleared before the cold rolling stage, and departmental clarifications supporting that construction are binding in adjudication.

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