ORDER

CA No. 3269 of 2003

1. The short controversy which arises for determination in this civil appeal is: whether the respondent assessee was entitled to claim the benefit of Exemption Notification No. 3/2001-CE dated 1-3-2001?

2. The assessee claims exemption under Sl. No. 200 of the said notification which claim was denied by the Department on the ground that trimmed or untrimmed circles of brass cannot fall under S1. No. 200 but they fall under S1. No. 201 where the rate of duty is Rs. 3500 pre metric tonne. It may be stated that if the product in question falls under S1. No. 200, then the rate of duty is nil. This is the narrow controversy in the present case.

3. To resolve this dispute, we quote hereinbelow the relevant extract of Notification No. 3/2001-CE dated 1-3-2001:

"SI. Chapter or Description of Rate Rate Condition No.

No. Heading Goods under Under

No. or Sub- The First the

Heading Schedule Second

No. Schedule

(1) (2) (3) (4) (5) (6)

200. 74.09 All goods other Nil - [If such goods are not

than trimmed or produced or

untrimmed manufactured by a

sheets of circles manufacturer who

of copper, produces or

intended for use manufactures copper

in the from copper one or

utensils or copper concentrate.]

handicrafts

201 74-09 Trimmed or Rs. 3500 - 33

untrimmed per [If,-

sheets or circles metric (a) no credit of

of copper, tonne duty paid on inputs

intended for use under Rule 57-AB or

in the Rule 57-AK of the

manufacture of Central Excise Rules,

handicrafts of 1944 has been

utensils taken.

(b) the entire

amount of duty is paid

in cash or through

account-current; and

(c) such goods are not

produced or

manufactured by a

manufacturer who

manufactures copper

from copper ore or

copper concentrate:

Provided that the

duty shall not be

payable by a

manufacturer who produces or

manufactures trimmed sheets or circles from

duty-paid untrimmed]

4. In this case it is not disputed by the Department before the Tribunal that the circles manufactured by the assessee are made from brass. According to the Department, brass is an alloy of copper/zinc and, consequently, trimmed or untrimmed circles of brass used in the manufacture of utensils would also fall in the entry at S1. No. 201 of the notification and, therefore, the assessee was liable to pay duty on such goods at the rate of Rs. 3500 per" metric tonne.

5. We find no infirmity in the impugned order of the Tribunal. On comparing the two entries, it is clear that if the goods in question are goods other than trimmed or untrimmed circles of copper, intended for use in the manufacture of utensils, then what is attracted is the nil rate of duty under the entry at S1. No. 200.

6. In this case, we are concerned with interpretation of entries in the notification. The exemption notification covers goods which squarely falls under Chapter Heading 74.09. In fact, both S1. No. 200 and S1. No. 201 of the notification deal with Chapter Heading 74.09. However, while giving exemption, a dichotomy is created between trimmed/untrimmed sheets of copper which attracts duty at the rate of Rs.3500 per metric tonne on one hand and, on the other, all goods other than trimmed/untrimmed circles of copper d intended for use in the manufacture of utensils which attract nil rate of duty. In this case, circles manufactured by the .assessee are made from brass. Therefore, in our view, S1. No. 200 would apply and the assessee would be entitled to claim nil rate of duty under the said notification.

7. We may also point out at this stage that it is a well-settled position in law that exemption notification has to be read strictly. A. notification of exemption has to be interpreted in terms of its language. Where the language is plain and clear, effect must be given to it. While interpreting the exemption notification, one cannot go b