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2022 (1) TMI 359 - CESTAT CHANDIGARHBenefit of area based exemption - Industrial Oxygen, Liquid Nitrogen and Nitrogen Gas are ‘Industrial Gases’ based on atmospheric fraction - benefit of exemption under N/N. 49-50/2003-CE dt. 10.06.2003 denied on account of the fact that gases manufactured by the appellants are ‘Inorganic Chemicals’ falling under Chapter 28 and are covered under the entry at S.No. 4 of the Annexure to the Notification No. 49/2003-CE dt. 10.06.2003 in negative list. For unit no. I - HELD THAT:- To find that the product which is manufactured by the appellant is industrial gas, manufactured by way of atmospheric fraction, which specifically covers at S.No. 16 of the schedule, therefore, it is to be seen that whether the appellant is entitled for benefit under notification or not that product qualifies at S.No. 16 of the schedule of notification or S.No. 4 of the Annexure. S.No. 4 of the Annexure covers inorganic chemicals, although industrial gases are inorganic chemicals, but there is a specific entry at S.No. 16 of the schedule which is the appropriate classification of the said goods and the Hon’ble Apex Court in the case of SPEEDWAY RUBBER CO. VERSUS COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH [2002 (5) TMI 51 - SUPREME COURT] has observed that as per Rule 3(a) of Interpretation Rules of Central Excise Tariff Act, 1985, the heading which provides most specific description shall be preferred to the heading providing a more general description. In the case of MANGALAM ALLOYS LTD. VERSUS COMMISSIONER OF CUS., AHMEDABAD [2010 (4) TMI 493 - CESTAT, AHMEDABAD], this Tribunal has further observed that if the goods falls in two entries of the notification, the assessee is entitled to choose the entry which is more beneficially to the assessee. As per the stated facts herein above that the industrial gases are covered at S.No. 16 of the schedule of the said notification, which is a specific entry, therefore, the appellant is entitled for exemption under Notification No. 49/2003-CE dt. 10.06.2003 at S.No. 16 of the schedule. In these circumstances, it is held that the goods of the appellant i.e. industrial gases are not covered under Annexure to the notification at S.No. 4 of negative list - the appellant is rightly claim the benefit of exemption at S.No. 16 of the schedule of Notification No. 49/2003-CE dt. 10.06.2003 for unit no.I. With regard to Unit No. II - HELD THAT:- The item manufactured by the appellant does not covered at S.No. 5 of the Annexure-1 (negative list) appended to Notification No. 50/2003-CE dt. 10.06.2003. Therefore, the appellant is entitled for benefit of exemption Notification No. 50/2003-CE dt. 10.06.2003 - the demand is sustainable against the appellant. Territorial Jurisdiction - HELD THAT:- In the show cause notice, the issue of Territorial Jurisdiction is not a subject matter. Therefore, argument advanced by the ld. A.R. is beyond the scope of show cause notice. Therefore, the said argument is of no value. The appellant for unit no.I is entitled for benefit of exemption Notification No. 49/2003-CE dt. 10.06.2003 at S.No. 16 and for unit no.II, the appellant is entitled benefit of exemption Notification No. 50/2003-CE dt. 10.06.2003 as same does not fall under S.No. 5 of the Annexure-1 (negative list) of the said notification - Appeal allowed - decided in favor of appellant.
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