TaxTMI 
TaxTMI 
2023 (3) TMI 827
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.... 2. In these appeals, the issue relates to applicability of exemption Notification No. 4/2006-CE dated 1.3.2006 at Sl. No. 72 which deals with the matches classifiable under Chapter 3605.00.10 or 3605.00.90. The same is extracted hereunder:- S. No. Chapter Description of excisable goods Rate Condition 72 36050010 Or 36050090 Matches or in relation to the manufacture of which none of the following processes is ordinarily carried on with the aid of power namely:- i) Frame filling ii) Dipping of splints in the composition for match iii) heads filling of boxes with matches iv) pasting to labels on match boxes, veneers or card boards; v) Packaging Nil 3. In terms of the above notification, the rate of duty is nil if no power is used, in any event, in anyone or more processes viz. frame filling, dipping, filling of boxes, pasting of labels or packing. 4. The facts in these appeals indicate that all the appellants are independent manufacturers of matches. These appellants 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 fillin....
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....cesses, then 'the benefit of the exemption _ notification is not available regardless of who used the power in that process or on whose account. 2. The assessee could either undertake the entire manufacture themselves: or outsource any of the processes to a job worker (who completes the process on account of the assessee) or they could purchase goods from a vendor (who completes the process on his own account and sells to the assessee) and then complete the remaining- processes. It is immaterial as far as the notification is concerned which method is adopted. What is crucial 'is whether the power has been used in any of these processes. 3. In the case of Standard Fireworks dealing with a notification similar to the present notification, Hon'ble Apex Court held that benefit of the notification is not available even if the processes were undertaken outside the factory of the assessee: with- the aid of power. In that: case, the power was used by the job workers in one of the processes. In the present case, ' the power is used by the vendor in one of the processes. What is relevant for the exemption notification is whether power was used in one of the six processe....
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....emption notification forbids the use of power in processes without reference to who undertakes the processes. 8. Over years, two different approaches were taken while interpreting the exemption notifications strict and liberal or purposive construction. Beneficial exemption notifications have, at times been interpreted so as to serve the purpose of the exemption notification without being unduly restricted by the words of the notification. Both approaches to interpret the notifications were taken even by the Supreme Court and therefore the issue was referred to the five member Constitutional Bench of the Hon'ble Supreme Court which has finally settled the law in the case of Dilip Kumar & Co. [2018 (361) ELT 0577 (SC)] in the following words: 52. To sum up, we answer the reference holding as under (1 ) Exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification. (2) When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the su....
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..... Thirdly, the circular was issued at a time when the issue of how to interpret an exemption notification was not settled by the Constitutional bench. of the Supreme Court in the case of Dilip Kumar (supra). Lastly, any clarification by the Board in the form of a Circular cannot prevail over the ruling of the Hon'ble Apex Court that the exemption notifications must be interpreted strictly with benefit of any doubt going against the assessee and in favour of the Revenue. Thus, I find that the circular relied upon does not carry the case of the appellants any further. 11. In view of the above, I find that the benefit of the exemption notification no. 4/2006-CE is not available to the assessees and the demands confirmed by the impugned orders need to be upheld and the appeals are liable to rejected." 7. The above view was confirmed by Third Member. The relevant portion of the order of the Third Member is extracted below:- "9.3 Firstly, the notification reads as: "Matches, in or in relation to the manufacture of which ....". It is important that it is either in the manufacture or in relation to manufacture of Matches with no caveat to either of the cases. 9.4 Secondly, the....
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....t to the assessee, not the manufacture and not even the manufacturer, but only to the goods specified. 12. It is the case of the appellants that they have procured dipped match splints from other manufacturers who have removed such goods on payment of duty. I find that this would not make any difference since the entitlement to exemption is to be determined separately in each assessee's case. The fact that duty has been paid on some intermediate/ semi-finished goods not themselves entitled to exemption is in no manner relevant to whether exemption is to be granted at a subsequent stage to the finished goods. In any event, the cascading effect is effectively mitigated by CENVAT credit. The exemption notification must be applied only to the goods it seeks to cover. 13. There are also references to many Circulars/Notifications by Member (Judicial), but as is well known, each Notification/ Circular is issued in particular circumstances, in respect of particular areas or sectors, with particular intentions. I am of the view that we must be circumspect in determining their analogous applicability to other circumstances. One size does not fit all. There can be no generality. 14. The....