Treatment of goods for the purpose of classification and exemption :
The meaning of “for the purpose of classification” as well as “for exemption” should be the same in view of the provisions of section 20 of the General Clauses Act .
The onus of proving dutiability is on the Department. However, in the case of exemption, the burden is on the tax payer claiming the exemption.
Relevant case laws
1. Eskayef Ltd. v. CCE 1990 (49) ELT 649 (SC)
The Supreme Court held that the exemption from payment of a excise duty which has been granted under a Notification is confined to goods falling under a particular Tariff Heading. Merely because a product can be used for the purposes as specified in the exemption notification does not qualify it for exemption, unless it also falls under the Tariff Heading specified in the Notification because the exemption cannot transfer product from one Tariff entry to another.
2. Naffar Chandra Jute Mills Ltd. v. Asst. CCE 1993 (66) E.L.T. 574 (Cal.)
The Calcutta High Court has held that the Rules for Interpretation of the Central Excise Tariff are applicable for interpreting exemption notifications as well.
3. Maestro Motors Ltd. 2004 (174) E.L.T. 289 (SC)
If a tariff heading is specifically mentioned in exemption notification, the Rules for Interpretation will apply to such exemption notification. However, if an item is specifically mentioned without any tariff heading, then exemption would be available even though for purpose of classification, it may be something else.