CX - If only genus is covered by exemption and not the individual species, in that case no exemption would be available: CESTAT
By TIOL News Service
MUMBAI, FEB 13, 2018: THIS is a Revenue appeal filed in the year 2007 against the order passed by the CCE, Mumbai-III, in terms of which the adjudicating authority had set aside the demand, penalties and seizure of goods against the Respondent.
The brief facts of the case are that the Respondent are engaged in the manufacture of excisable goods viz. Chequered Tiles, Rockard designer Tiles, Plain cement Tiles and Paver blocks etc. falling under CSH 6807.90 and the same have been classified as Exterior Mosaic Tiles. The Respondent were availing exemption under Notification No. 10/2003-CE dt 1.3.2003 and other analogous Notifications issued previously and post the said Notification, thereby paying concessional rate of duty as prescribed under the notifications.
It is the case of the department that the goods have been misclassifiedas Mosaic Tiles inasmuch as the goods manufactured viz. Chequered Tiles, Plain cement tiles, Solid Rock pavers, Rock tiles, Rockard designer tiles and Paver Blocks are not commercially known as “Mosaic tiles” and hence the exemption is not available. Furthermore, the product brochures separately advertised the Mosaic Tiles (grey and white).
The impugned entry in the notification reads thus -
| 68.07 |
Mosaic tiles, that is to say, tiles known commercially as ‘mosaic tiles' |
Nil |
In appeal, the AR emphasized that from the plain reading of the entry it is clear that the exemption is available only to those tiles, which are commercially known as Mosaic Tiles whereas the Tiles cleared by the Respondent were commercially known as Chequered Tiles,Rockard designer Tiles, Plain cement Tiles and Paver blocks as described in the product catalogue, delivery challan and commercial invoices etc.; that if the intention was to grant exemption to Mosaic Tiles un-equivocally, there ought to have been reference only to the goods Mosaic Tiles ; the usage of additional words “that is to say, tiles known commercially as mosaic tiles” emphasises that these goods should commercially be known as Mosaic Tiles. Reliance is placed on apex court decisions to highlight that a notification has to be read strictly.
The respondent supported the order of the adjudicating authority.
After considering the submissions made by both sides, the Bench inter alia observed thus -
++ It is not forthcoming from the SCN as to whether the Tiles are known as mosaic tiles or not.
++ The revenue has not brought any fact on record that the tiles were not Mosaic or commercially not known as Mosaic.
++ The dictionary meaning of Mosaic means a picture or decorative design made by small coloured pieces of stones or tiles into a surface or the process or art of making such pictures or design.
++ We find that no adverse allegation is appearing in SCN against the Respondent that the Tiles manufactured by them do not fulfill the above criteria of Mosaic. We are in agreement with the submission of the Respondent that the nomenclature on delivery challans vis-à-vis that reflected in excise document cannot be considered as adverse view against them.
++ What is important is that the goods under reference must belong to the category of Mosaic Tiles so as to eligible for exemption from duty.
++ In the present case, the Tiles as per the terminology used are Chequered,Rockard etc. to represent them individual species of the genus Mosaic Tiles.
++ If only genus is covered by the exemption and not the individual species in that case no exemption would be available where the genus is named in exemption and not the individual species.
Relying on the apex court decision in Kedia Agglomerated Marbles Ltd. - 2003-TIOL-108-SC-CX, the CESTAT concluded that the individual name of Tiles as Chequered, Rockard or plain tiles would not exclude them from claiming exemption since the goods in question are commercially known as Mosaic Tiles.
The impugned order was upheld and the Revenue appeal was rejected.
(See 2018-TIOL-533-CESTAT-MUM)
