Full Judgment Text
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CASE NO.:
Appeal (civil) 3504 of 1997
PETITIONER:
M/s Elphinstone Metal rolling Mills
RESPONDENT:
Collector of Central Excise, Bombay
DATE OF JUDGMENT: 05/05/2004
BENCH:
CJI & G.P. MATHUR
JUDGMENT:
J U D G M E N T
RAJENDRA BABU, CJI :
The appellant is engaged in the manufacture of
(i) Copper Sheets and Circles falling under Tariff Item
No.26A (2) out of Copper Scrap and Copper Wire Bars,
(ii) Copper Wire Bars, Copper Wire rods and castings
not otherwise specified falling under Tariff Item
26A(1a), and (iii) Copper slabs and billets falling under
Tariff Item 26A(1) out of old Copper Scrap and Scrap
of Copper Wire bars.
It is contended by the appellant that they are
entitled to claim exemption under Notification
No.74/65-CE dated 1.5.1965 as amended for the
product Copper Sheets and Circles falling under Tariff
Item 26A(2) and exemption under Notification
No.119/66-CE dated 16.7.1966 as amended for the
products Copper Wire Bars, Copper Wire rods and
Castings not otherwise specified falling under Tariff
Item 26A(1a) and Copper slabs and billets falling
under Tariff Item 26A(1) in its classification list dated
25.3.1983 using the raw materials mentioned as
aforesaid for the relevant period.
The Adjudicating Authority, the Appellate
Authority and the CEGAT did not accept the claim
made by the appellant. The contention put forth
before us is that the Notification in question dated
19.8.1980 exempting manufacturer of Copper, that is
to say, plates, sheets, circles, strips and foils in any
form or size falling under Tariff Item 26A(2) in the
manufacture of which Copper in any form is used and
on the virgin copper or the copper content of the alloy,
the prescribed amount of duty of excise to be paid or
is deemed to have been paid prescribing duty at the
rate of Rs.700 PMT.
Under Notification dated 19.6.1980, it is claimed
that the waste or scrap obtained from copper as
Copper alloy where the prescribed amount of duty of
excise has been paid on the copper or the copper
content of the alloys would be exempted from taxation
and the appellant had filed classification on that basis.
Show cause notices were issued to the appellant
to the effect that their claims for
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exemption/concession asked for under Notifications in
question cannot be accepted. There is the contention
of the appellant that this notice has been issued
sixteen months after the filing of the Classification.
The Tribunal took the view that the exemption is
subject to the condition that the raw material out of
which final product is manufactured should be duty
paid, either the proof of such payment of duty on raw
materials should be appropriate or there should be a
deeming order that such raw materials are deemed to
be treated as duty paid.
The claim of the appellant that the scrap had
been purchased from the open market and, therefore,
it should be deemed that it has been duty paid, the
Assistant Collector took the view that the products are
manufactured out of scrap purchased in the open
market for which no duty paying documents are
produced, exemption could not be extended to these
products. The Waste and Scrap was dutiable only
when it was a manufactured product and was
otherwise excisable under the provision of the Act. All
waste and scrap is neither a manufactured product nor
is excisable and on this basis held that the appellant is
not entitled to the benefit of the relevant Notifications.
We think the view taken by the Tribunal cannot
be considered to be as inappropriate. Unless the
scrap and waste are goods that had been used can be
demonstrated to have been a duty paid goods, it
cannot be assumed that they are so, particularly when
it cannot be said with certainty that all scrap and
waste material used has been subject to excise duty
earlier. The waste and scrap was dutiable only when
it is a manufactured product and not otherwise. The
object of exemption being to avoid cascading effect in
the matter of payment of excise duty.
Therefore this contention on behalf of the
appellant is rejected. So far as the question of
limitation is concerned, we find that the classification
list filed by the appellant dated 25.3.1983 was not
approved and a show cause notice was issued on
23.7.1984. The approval was accorded only on
15.9.1984. As there was no approval of the
classification list and there was no final assessment,
we think, in the circumstances of the case the bar of
limitation would apply only from the date of the
finalization of the classification and we do not find that
the decisions relied upon by the appellant either in
Samrat international (P) Ltd. vs. Collector of
Central Excise, 1992 (58) ELT 561 or in Collector of
Central Excise, Baroda vs. Cotspun Limited, 1999
(113) ELT 353 have any application to the present
facts of the case.
Appeal, therefore, stands dismissed.