The Chennai Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that no duty Exemption on Box filling and packaging ‘machine dipped match splints’ without the aid of power.
The appellants are independent manufacturers of matches who purchased ‘machine dipped match splints’ from other match splint manufacturers who were using power in the manufacture of these match splints. Then they undertook box filling and packaging without the aid of power and then cleared at nil rate of duty. Revenue denied the benefit of Notification No. 4/2006-CE dated 1.3.2006 as they have purchased the match splints from other manufacturers who have used the power about their manufacture of these match splints.
As per the notification nil rate of duty for matches in or about the manufacture where none of the following processes is ordinarily carried on with the aid of power namely (i) frame filling and (ii) dipping of splints in the composition for match heads (iii) filling of boxes with matches (iv) pasting of labels on matchboxes and (v) packings.
In the case of Sri Ganapathy Packing Vs. Commissioner of GST and Central Excise, it was observed that “the exemption is not available only if the power was not used by the assessee, one neéds to insert the words ‘by the manufacturer or his job workers’ in the notification and read it as Matches, in or about the manufacture of which none of the following processes is ordinarily carried on with the aid of power by the assessee. To hold that the exemption is not available only if the power was not used by the assessee or his job workers, one needs to insert the words the manufacturer or his job workers’ in the notification.”
The assessee is doing mere packing of the splints into boxes and no new commodity has come into existence and there is no Chapter Note in the Central Excise Tariff to hold that packing of matches amounts to manufacture. Matchboxes are countable but they can also be weighed. Simply because they can be easily counted and the standard unit indicated in the tariff is kg, it does not mean that no excise duty is payable on matches in boxes. Several other goods in the same chapter which are equally countable such as safety fuses, detonators, signalling flares etc., all have the standard unit as kg. This does not make them not dutiable.
Applying the ratio laid down in the majority order, the Coram comprising of Ms Sulekha Beevi C.S., Member (Judicial) and Shri Vasa Seshagiri Rao, Member (Technical) upheld the impugned order and dismissed the appeal.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
