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TMI Blog2022 (1) TMI 359X X X X Extracts X X X X X X X X Extracts X X X X ..... which attracts nil rate of duty. Both the units were availing benefits of Notification No. 49-50/2003-CE dt. 10.06.2003. By way of issuance of the show cause notice, proceedings were initiated against the appellant alleging that the products manufactured by them were not eligible for benefit under the said area based exemption notification as the same falls at S.No. 4 & 5 of the Annexure appended as negative list to the said notifications. The said notifications provide exemption only to the goods manufactured in the state of Himachal Pradesh and specified in the schedule of notifications. The said notifications also contains a negative list of goods given in Annexure appended to the said notifications which clearly implies that exemption shall not be available to the goods falling under negative list. 5. In view of the above facts, a show cause notice was issued to the appellants to deny benefit of the above said notifications consequently, to demand duty along with interest and to impose penalties. The matter was adjudicated. The demand of duty was confirmed along with interest and penalties were also imposed. Against the said order, the appellant is before us. 6.1 The ld. Coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - 2002 (143) ELT 8 (SC) to say that the heading which provides the most specific description shall be preferred to the heading quoting a more general description. He also relied on the decision of this Tribunal in the case of Mangalam Alloys Ltd vs. CC, Ahmedabad - 2010 (255) ELT 124 (Tri. Ahmd.) to say that if there are two entries which cover the goods, the appellant can claim the benefit of more beneficial entry. 6.6 Further, he submitted that authorities below have interpreted the beneficial exemption notification in a narrow manner to defeat the purpose of notification. To support this, he relied on the decision of this Tribunal in the case of Ellora Paper Mills Ltd vs. CCE - 1991 (56) ELT 489 (Tri.). If view taken by the authorities below is upheld, it will make the entry against S.No. 16 of the notification as redundant or nugatory, as all the industrial gases are either inorganic chemical or organic chemical which find place in negative list appended in the Notification No. 49-50/2003-CE dt. 10.06.2003. So denial of benefit of exemption is contrary to settled position of law. 6.7 He further submitted that it is a settled proposition of law that if two interpretation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elding. It is his submission that the Acetylene Gas is not manufactured by way of atmosphere fraction and cannot be held to be covered against entry of S.No. 16 of the schedule positive list appended to Notification No. 49/2003-CE dt. 10.06.2003. Both the authorities below have not disputed that Acetylene Gas is an 'Industrial Gas'. 6.15 It is his submission that the benefit of Notification No. 50/2003-CE dt. 10.06.2003 is available to the appellant as there is no positive list and conditions mentioned against S.No. 5 of Annexure 1 of negative list appended to notification are not satisfied or fulfilled to fall under negative list as the goods mentioned at S.No. 5 of negative list appended to notification clearly provides that only those items are covered under said entry which are to be an organic chemical, item to be classifiable under Chapter 29 of the said schedule and item should be classifiable under sub-class 24117 of NIC Classification, 1998. Dissolved Acetylene Gas has been allotted sub-class 24111 under NIC Classification, 1998, whereas sub-class mentioned against S.No. 5 under column (4) is 24117 which pertains to basic inorganic chemicals (NEC). Sub-class allotted to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o headings providing a more general description. Thus, there is no merit in the contentions of the Appellant No.1 as notification no.49/2003-CE specifically excludes the goods given under Annexure of said notification from the benefit of duty exemption. As such, there is no ambiguity that goods falling in the negative list i.e. under Annexure of said notification shall NOT be eligible for benefit of exemption of duty. It is admitted fact that oxygen and nitrogen (including liquid nitrogen) are Inorganic Chemicals falling under chapter 28. Inorganic Chemicals are specifically mentioned at Sr.No.4 of the Annexure (Negative list) of the notification no.49/2003-CE. The said entry specifies that all the inorganic chemicals of Chapter Heading 28 except for medicinal grade oxygen (2804.11), medicinal grade hydrogen peroxide 2847.11) and compressed air (2851.30), would fall under the exclusion for the benefit of said notification. Thus, the demand of Rs. 52,56,140/- along with interest has been confirmed rightly against Appellant No.1. 5. Appellant No.2 has not contested the fact that dissolved acetylene gas industrially produced is not manufactured by the fraction of air but by reaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in/bata (shikmi) Nos.} Name of Tehsil / Sub-Tehsil 13 Sadar IA - Mandi (Sauli Khad) 341(1 to 479), 342(1 to 535), 343(1 to 270), 344(1 to 6), 345(1 to 1161) Sadar Mandi Hence, benefit of neither Notification No.49/2003 nor 50/2003 is available to the appellant. 6. They have claimed that income tax authorities have allowed the benefit. In this regard the adjudicating authority has categorically observed that the said orders have been passed as a result of Income Tax Act and second the orders were not deliberated upon and reasoned in the light of Central Excise Law particularly when the schedule to the said notification is not existing in the schedule to the Income Tax Act. 7. That as regards denial of SSI exemption under Notification No.8/2003-CE dated 1.3.2003, it is admitted fact the appellants are proprietorship concerns of Sh. Rajinder Prasad Kapoor and therefore sales of both the units has been clubbed in view of the provisions of Notification No.8/2003-CE dated 1.3.2003, as amended. Also the said clubbing has not been contested by the appellants. Only they contended that even after clubbing, their year-wise aggregate sale value of excisable goods was less th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at Credit Rules, 2004 being, inputs having been purchased from an unregistered dealer. 11. Reliance on the judgments in the case of Hemraj Gordhandas Vs H.H. Dave 1978(2) ETL (J350) and Speedway Rubber Co. Vs CCE 2002(143) ELT 8(SC) are mis-placed. A notification is to be read as a whole as held by various Courts. Reliance is placed on the judgment in the case of UOI Vs Ganesh Metal Processors Industries 2003 (151) ELT 21 (SC) wherein it has been held in Para 5 as under: "The Notification has to be read as a whole. If any of the condition laid down in the Notification is not fulfilled, the party is not entitled to the benefit of that Notification." Reliance on K.R. Steels Union Ltd Vs CC 2001(129) ELT 273(SC) is thus of no use to the appellants. Similarly, reliance on Elora Paper Mills Ltd Vs CCE 1991 (56) ELT 489 is also not in appellants favour as the interpretation being made by them is to make the notifications nugatory. Likewise reliance on Sheen Golden Jewels (I) Pvt. Ltd Vs State Tax Officer (IB) 2019 (23) GSTL 4 (Ker) is also not applicable to the case as there are no two interpretations forth coming from the said notifications. 12. The said Notifications clearly spe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... medicinal grade oxygen (28044010) medicinal grade hydrogen peroxide (28470000), compressed air (28530030) 28 --- 9.3 The case of the Revenue is that these are inorganic chemicals falling under negative list and classified under Chapter 28 of the Central Excise Tariff Act, 1985, therefore, the appellant is not entitled for the benefit of exemption notification. 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. (supra) 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 p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rganic chemicals, while the NIC Code 24117 mentioned therein on the contrary refers to inorganic chemicals. 14. Putting together all the facts brought out above, the letter of the GOI to the DIC, Himachal, which as per the Ld.Pr.CIT the AO failed to consider, stated the item manufactured by the assessee as covered under serial no.5 of the negative list, but the item manufactured by the assessee does not have the NIC CODE mentioned against the said serial NO. of the negative list and also that the description of items in the said serial no. is ambiguous mentioning organic chemicals under some descriptions and inorganic chemicals against other description. There is no dispute vis a vis the aforestated facts. 15. Perusing the manner of description of items falling in the negative list, i.e. Schedule XIII of the Income tax, there is no doubt that to qualify as an item covered therein, all the manners of describing the items has to be satisfied. It has to fit into the description, belong to the specified chapter of Excise classification and also qualify as item of the specified NIC CODE. In the present case the uncontroverted fact is that the NIC CODE of the item manufactured by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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