ORDER
T.K. Jayaraman, Member (T)
1. The appellants manufacture rubberized coir products such as mattresses at Hosur. For the above purpose, the appellants manufacture intermediary products namely PU foam and quilted PU foam. They claim benefit of exemption for the intermediary products namely PU foam and quilted PU foam. under Notification No. 115/75 as amended. The issue is whether intermediary products manufactured are entitled for the above exemption or not. The Commissioner of Central Excise in the impugned order dated 31.3.03 has denied the exemption. The appellants strongly challenged the OIO.
2. Shri Joseph Vellapally Sr advocate along with Shri C. Muralidharan, Advocate appeared for the appellants and Shri P M Saleem SDR appeared for the revenue.
3. The learned advocate argued that Notification No. 115/75 dated 30.4.75 as amended from time to time exempts goods (other than rubberized coir mattresses, mixed vegetable oils of heading No 15.03 and vegetable fats and oils of heading No. 15.04) falling under the schedule to the Central Excise Tariff Act and manufactured in factories covered by any of the industries specified in the schedule annexed from the whole of duty of excise. The schedule lists the following industries.
1) Coir Industry
2) Cashew Industry
3) Tanning industry
4) Oil mill and solvent extraction industry
5) Rice milling Industry
The appellant’s unit is coir industry. A plain reading of the above Notification makes it clear that all the goods with the exception of rubberized coir mattress which is specifically excluded in the Notification, manufactured by the factory covered by coir industry are entitled for the exemption. Intermediary products manufactured by the appellants namely PU foam and PU quilted foam are not excluded in the above notification. Hence there is no reason why the exemption should be denied, if the product is manufactured by a factory coming within the purview of coir industry. In this connection, he relied on the following case laws.
1) Coir Cushion P. Ltd. v. CCE Meerut (1999 (108) ELT 432 (T)
2) Pyarelal Coir Products (P) Ltd. v. CCE Meerut (2000 (115) ELT 591(T)
3) G.P. Industries v. CCE Guntur (2000 (121) ELT 152 (T)
4) Regal Industries v. CCE Chandigarh (2001 (130) ELT 176)
5) Synthite Industrial Chemicals v. CCE Cochin (2002 (147) ELT 1071)
6) Hindustan Coir Products v. CCE Meerut (2002 (148) ELT 1085)
In the Coir Cushion case, the CEGAT held that latex mix manufactured by coir Industry is entitled for exemption under Notification No 115/75. While deciding the above case, the CEGAT has followed the interpretation of the same notification by the Hon’ble SC of India in the case of Bombay Oil Industries Ltd (1997 (91) ELT 538 (SC). In the above case, the Supreme Court has observed
“The said notification exempts goods manufactured in factories covered by the industries specified in the schedule. Item 4 of the Schedule specifies the oil mill and solvent extraction industry. It may be that ordinarily an industry of this nature would have both an oil mill and solvent extraction plant both of which manufacture vegetable oils, but that is no reason, in our view, to place upon the plain words of the notification a narrower meaning than that to which they plainly lend themselves. The notification exempts goods manufactured in factories of the oil mill and the solvent extraction industry. The appellants goods are goods manufactured in a solvent extraction plant and must, on the plain words of the notification, receive the benefit of the exemption that it confers.”
Following the decision in the Coir cushion Industries, the CEGAT in Pyarelal Coir Products v. Collector of Central Excise Meerut has held that though latex mix is a product of rubber industry, it is eligible for exemption under 115/75 when manufactured in a factory of coir industry. In Synthite Industrial Chemicals case, the CEGAT held that Sandal wood oil manufactured in factories of oil mill and solvent extraction industry is entitled for exemption under Notification No 115/75 even though the process of manufacture of sandal wood oil is not by solvent extraction method and only by steam distillation process. It was held that plain words of the Notification should not be given narrow meaning. In Hindustan Coir Products case, it was held that rubber compounds manufactured and captively consumed in the manufacture of final product coir mattresses and coir cushion will be covered for exemption under Notification No. 115/75, as final products fall within scope of coir industry.
4. Learned SDR reiterated the contentions mentioned in the OIO passed by the adjudicating authority. He maintained that product of the coir industry is only entitled for the exemption and PU foam is not a product of the coir industry. The adjudicating authority has gone by the definition of coir products in Coir Industries Act 1953 and came to the conclusion that the impugned goods would not be covered as a coir product. He has also reasoned that the intermediary products manufactured by the appellants will be used in rubberized coir . Mattresses which themselves are excluded from the scope of Notification No.115/75. Therefore the notification will not be cover the intermediary products. He has also held that the appellant will not be entitled to the benefit of Notification 67/95, as the final product rubberized mattresses are exempt by Notification No. 3/2001 as amended by Notification 43/2001. The adjudicating authority has relied on the decision in Collector of Central Excise Rajkot v. Wipro Ltd. reported in 1997 (95) ELT 552 (T) wherein the CEGAT has held that exemption under notification No115/75 would not cover all goods manufactured in the factories/industries specified in the schedule to the Notification.
5. We have considered the rival submissions. Notification No 115/75 exempts goods manufactured by a factory coming under coir industry. The fact that the appellant is a coir industry is not in doubt. While interpreting the same notification the Hon’ble SC has held that”-
“But there is no reason in our view to place upon the plain wordings of the notification a narrower meaning than that to which they plainly lend themselves.”
In this case, the PU foam is manufactured by the appellants for captive consumption and for use in his sister unit for the manufacture of rubberized mattresses. Moreover there is no restriction for granting exemption in this notification for PU foam. It is also seen that under the same notification latex has been granted the benefit of exemption. Even though sandal wood oil has not been extracted by solvent extraction process, the very fact that the industry is coming within the purview of solvent extraction industry was enough to grant exemption. As regards the case law relied on by the adjudicating authority, it is seen that the Tribunal in the case of Collector of Customs Vs Wipro Ltd., decided that oxygen & hydrogen would not be covered under the Notification 115/75, because prior to it’s amendment, the notification covered only goods falling under item 68 of the Tariff and at that time, oxygen was not covered under Item 68 and the Board clarified in its clarification dated 4.5.1988 that the exempted goods mentioned in the Notification 115/75 cover only paras item 68 goods. In view of the Board’s clarification, the Tribunal took the decision that all goods are not covered by Notification No.115/75. However, in view of the interpretation of the same Notification by Hon’ble S.C., we are not inclined to accept the above decision of the CEGAT. We would like to reiterate that any product irrespective of its classification manufactured by a factory coming under coir industry will get the benefit of exemption Notification 115/75, unless it is specifically excluded. In view of the above findings we allow the appeal.