2000 (7) TMI 807 - AT - Central Excise

Summary

Issues:
Entitlement to benefit of Notification No. 202/88 for exemption on final products manufactured from re-rollable scrap, segregation of scrap purchased from ship breaking units and market, applicability of Modvat credit, classification of final products as per notification.

Analysis:
The appeals raised a common question regarding the entitlement to the benefit of Notification No. 202/88 for exemption on final products manufactured from re-rollable scrap. Previous judgments denied the notification for scrap obtained from ship breaking units, a decision upheld by the Apex Court. The appellants admitted purchasing various materials from the market and ship breaking units for their final products. The counsel contended that segregating invoices between ship breaking scrap and market purchases was necessary, citing precedents where benefits were granted for market purchases. They argued for Modvat credit on items not entitled to the notification and clarified their use of re-rollable materials without a melting furnace.

The Department reiterated its stance based on a previous order noting that the appellants claimed to buy bazaar scrap, which should be specified in the notification for exemption. The final products, M.S. Rounds and Flats, did not align with the notification's descriptions, leading to a denial of benefits. Upon reviewing the submissions and judgments, it was observed that the Commissioner's orders were issued before key Tribunal decisions and a Board's clarification on re-rollable material. The matter was remanded for fresh consideration in light of established judgments, emphasizing the exclusion of benefits for scrap from ship breaking yards, and the need for a re-examination of evidence.

The Tribunal set aside the impugned orders and remanded the case for a fresh review by the original authority. The appellants were granted a personal hearing and the opportunity to present evidence supporting their position. The original authority was directed to re-examine the issue and make appropriate decisions based on the available evidence. The appeals were allowed by way of remand, emphasizing the need for a detailed reconsideration in line with established legal principles and judgments.