The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), allowed excise duty exemption to pre laminated bagasse board and observed that no compulsion should be given to opt for notification which has higher duty liability.
The respondent, Richa Particle Board Pvt Ltd, is engaged in the manufacture of Plain Bagasse Board and Prelam Bagasse Board falling under Chapter 44109090 and 44101190 respectively of the Central Excise Tariff Act, 1985. A show cause notice was issued to the respondent proposing to demand and recover central excise duty of Rs. 2,88,67,398/- along with interest and penalty.
In adjudication, the Commissioner observed that respondent is eligible to avail the benefit of Notification No. 6/2006-CE dated 01.03.2006 as the same is beneficial to them and dropped the proceeding initiated against the respondent. Being aggrieved by the said impugned order the revenue filed the present appeal.
Kalpesh Shah, Assistant Commissioner (AR), who appeared on behalf of the revenue reiterated the grounds of appeal and that the Adjudicating authority has observed that there is ambiguity in as much as two different exemption notification seemed to be operating simultaneously and also covering the same products, providing two different applicable rates of duty. In such situation, the beneficial notification should be allowed to the assessee citing various court rulings.
Hiren J Trivedi, Counsel, for the respondent supported the finding of the impugned order and submits that it is settled law duly substantiated by various authorities and judgments of the Judicial court that in case of two notification operating simultaneously, for the same product, provide two different applicable rates of duty, the beneficial notification should be allowed to the assessee.
A Two-Member Bench comprising Ramesh Nair, Judicial Member and CL Mahar, Technical Member observed that “However, we note that there is no dispute that the appellant is manufacturing bagasse board which is covered by Sl. No. 82 of Notification No. 6/2006. No evidence and reason have been produced by the department regarding the dispute that as to why the product manufactured by the respondent cannot be called as bagasse board.”
“We find that the impugned goods are eligible to get exemption without any condition under these two notifications. The respondent cannot be compelled to opt for a notification which has higher duty liability” the Bench concluded.
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