IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.3269 OF 2003

Commissioner of Central Excise, Jaipur ...Appellant(s)

Versus

M/s. Mewar Bartan Nirmal Udyog ...Respondent(s)

W I T H

CIVIL APPEAL NOS.1269/2005, 3688/2005, 3636/2006, 1477/2007, 2725/2007, 383/2008 AND CIVIL APPEAL NO.5988/2008 (Arising out of SLP(C) No.6398/2007)

O R D E R

In C.A.No.3269/2003:

The short controversy which arises for determination in this Civil Appeal

is:  Whether  the  respondent-assessee  was  entitled  to  claim  benefit  of  exemption

Notification No.3/2001-CE, dated 1.3.2001?   

The  assessee  claims  exemption  under  S.No.200  of  the  said  Notification

which  claim  was  denied  by  the  Department  on  the  ground  that  trimmed  or

untrimmed circles of brass cannot fall under S.No.200 but they fall under S.No.201

where rate of duty is Rs.3500 PMT.  It may be stated that if the product in question

falls under S.No.200, then the rate of duty is nil.  This is the narrow controversy in

the present case.

To  resolve  this  dispute,  we  quote  hereinbelow  relevant  extract  of

Notification No.3/2001-CE, dated 1.3.2001.

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S.No. Chapter or heading No. or sub- heading No.

Description of goods Rate under the  First Schedule

Rate under the Second Schedule

Condition No.

200 74.09 All  goods  other  than trimmed  or  untrimmed sheets of circles of copper, intended  for  use  in  the manufacture of utensils or handicrafts

Nil -       32

If such goods are not produced  or manufactured  by  a manufacturer  who produces  or manufactures copper from  copper  ore  or copper concentrate.

201 74.09 Trimmed  or  untrimmed sheets of circles of copper, intended  for  use  in  the manufacture  of handicrafts or utensils

Rs.3500 per metric

tonne

-       33 If,-

(a) no credit of  duty paid on inputs under rule  57AB  or  rule 57AK of the Central Excise  Rules,  1944 has been taken;

(b) the entire amount of  duty  is  paid  in cash  or  through account-current; and (c)  such  goods  are not  produced  or manufactured  by  a manufacturer  who produces  or manufactures copper from  copper  ore  or copper concentrate:

Provided  that  the duty  shall  not  be payable  by  a manufacturer  who produces  or manufactures trimmed  sheets  or circles  from  duty paid  untrimmed sheets or circles.

In this case it is not disputed by the Department before the Tribunal that

the  circles  manufactured  by  the  assessee  are  from  brass.   According  to  the

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Department,  brass  is  an  alloy  of  copper/zinc  and,  consequently,  trimmed  or

untrimmed circles of brass used in the manufacture of utensils would also fall in the

Entry at S.No.201 of the Notification and, therefore, the assessee was liable to pay

duty  on  such  goods  at  the  rate  of  Rs.3500  PMT.   We  find  no  infirmity  in  the

impugned order of the Tribunal.  On comparing the two Entries, it is clear that if the

goods in  question are goods other than trimmed or  untrimmed circles  of  copper,

intended for use in the manufacture of utensils, then what is attracted is the nil rate

of duty under Entry at S.No.200.  In this case, we are concerned with interpretation

of  Entries  in  the  Notification.   The  exemption  Notification  covers  goods  which

squarely falls under Chapter Heading 74.09.  In fact, both S.No.200 and S.No.201 of

the Notification deal with Chapter Heading 74.09.  However, while giving exemption,

a dichotomy is created between trimmed/untrimmed sheets of copper which attracts

duty at the rate of Rs.3500 PMT on one hand and, on the other, all goods other than

trimmed/untrimmed circles of copper intended for use in the manufacture of utensils

which attract nil rate of duty.  In this case, circles manufactured by the assessee are

made from brass.   Therefore, in our view,  S.No.200 would apply and the assessee

would be entitled to claim nil rate of duty under the said Notification.   

We may also point out at this stage that it is well settled position in law that

exemption Notification has to be read strictly.  A notification of exemption has to be

interpreted in terms of its language.  Where the language is plain and clear, effect

must be given to it.  While interpreting the exemption notification, one cannot go by

rules of interpretation applicable to cases of classification under the Tariff.   Tariff

items in certain cases are required to be interpreted in cases of classification disputes

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in terms of HSN, which is the basis of the Tariff.  In this case, we are not concerned

with interpretation of Tariff.  In fact, as stated above, the product in question falls

under  Chapter  Heading  74.09.   It  is  the  dichotomy  which  is  introduced  by  the

exemption  Notification  which  needs  to  be  interpreted.   Items made  from copper

attract duty at the rate of Rs.3500 PMT whereas circles made from brass attract nil

rate of duty.  As stated above, in this case, the Department has not disputed the fact

that  the circles were manufactured by the assessee from brass.   This  is  expressly

recorded in the findings given by the Tribunal.

In  the  circumstances,  we  find  no  infirmity  in  the  impugned  decision.

Consequently, the Civil  Appeal filed by the Department stands dismissed, with no

order as to costs.

In C.A.Nos.1269/2005,3688/2005,3636/2006,1477/2007,2725/2007, 383/2008 and S.L.P. (C) No.6398/2007:

Leave granted in S.L.P.(C) No.6398/2007.

Delay condoned in C.A.No.3636/2006.

In view of the order passed today in C.A.No.3269/2003, these appeals are

dismissed, with no order as to costs.

                         ...................J.               (S.H. KAPADIA)

                        ...................J.

                                       (B. SUDERSHAN REDDY)

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New Delhi, September 30, 2008.

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