1997 (1) TMI 399 - AT - Central Excise

Summary

Issues:
Eligibility of Ferro Alloys for exemption under Notification No. 209/83-C.E.

Detailed Analysis:
The appeal filed by M/s. Anand Engineering Corpn. questioned the eligibility of their product, Ferro Alloys, for exemption under Notification No. 209/83-C.E., dated 1-3-83, which exempted Ferro Alloys from excise duty if manufactured without the aid of power using the aluminothermic or thermit process. The Assistant Collector, Central Excise, Thane initially ruled in favor of the appellant, stating that power was not used in the manufacture of Ferro Alloys. However, on appeal by the department, the Collector of Central Excise, Bombay reversed this decision, claiming that the mixing of metalic oxide with aluminum powder using power disqualified the Ferro Alloys from the exemption. The Tribunal referred to a previous decision in the case of Eastern Metal and Ferro Alloys Ltd. v. CCE, Bhubneshwar, which clarified that Ferro Alloys could be manufactured without the aid of power, even if power was used in processes like mixing or hoisting that did not directly contribute to the manufacturing process.

The Tribunal analyzed the technical aspects of Ferro Alloys production and the historical context of excise duty exemptions related to Ferro Alloys in the steel industry. It noted that under the old Central Excise Tariff, Ferro Alloys were granted input relief when used in steel manufacturing. Subsequently, amendments were made to exempt Ferro Alloys if manufactured using the aluminothermic or thermit process, regardless of power usage. The Tribunal emphasized that the use of power in ancillary processes like hoisting did not disqualify Ferro Alloys from the exemption if the alloy itself was made without power. The decision highlighted the importance of Ferro Alloys as a crucial input in steel manufacturing and the evolution of excise duty exemptions to support the steel industry.

In conclusion, the Tribunal disagreed with the Collector of Central Excise, Bombay's interpretation and allowed the appeal filed by M/s. Anand Engineering Corpn. The judgment reaffirmed that Ferro Alloys could be eligible for exemption under Notification No. 209/83-C.E. if manufactured without the aid of power using the aluminothermic or thermit process, as clarified in previous decisions and supported by the technical and historical context of Ferro Alloys production and excise duty exemptions in the steel industry.