1977 (10) TMI 106 - HC - Central Excise

Summary

Issues:
Claim for refund of excise duty based on exemption notification; Classification of manufactured goods under excise duty; Rejection of claim by Central Excise authorities; Shifting stand of petitioners on classification and raw material used.

Analysis:
The petitioners, manufacturers of brass cylinders, pipes, and tubes, sought to quash orders by Central Excise authorities regarding the levy of excise duty on their goods and subsequent rejection of their claim for refund. The petitioners claimed exemption from excise duty under a notification exempting copper and copper alloys. The authorities rejected the claim, leading to this petition under Article 226 of the Constitution.

To understand the contentions, relevant provisions of the Central Excises and Salt Act, 1944, and the exemption notification were reviewed. The Act provides for the levy of excise duty on goods manufactured in India. The notification exempted copper and copper alloys from excise duty under specific conditions.

The petitioners described their goods as brass cylinders, pipes, and tubes, which were classified as 'castings' under the Act. They claimed to have manufactured the goods from old scrap of copper and copper alloys, as per the exemption notification. However, their claim was rejected by the authorities citing lack of evidence on the use of crude metal in manufacturing.

The Central Government, in a subsequent order, classified the petitioners' goods under the exempt category. The Court held that if the goods were made from old scrap of copper and copper alloys, as claimed by the petitioners, they should be examined for exemption accordingly. The authorities were directed to reevaluate the claim for refund based on this clarification.

The Court allowed the petition, quashed the previous orders, and instructed the Central Excise authorities to reexamine the claim for exemption in light of the clarification provided. The petitioners were to be refunded any excess excise duty collected. Each party was directed to bear their own costs in this matter.