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Issues Involved:
1. Classification of imported copper scrap under Central Excise Tariff and liability to countervailing duty. 2. Eligibility for exemption from countervailing duty under Notification No. 35/81. Issue-wise Detailed Analysis: 1. Classification of Imported Copper Scrap and Liability to Countervailing Duty: The respondents imported copper scrap, which was assessed to basic duty under entry 74.01/02 of the Customs Tariff and additional duty under Item 26A (1b) of the Central Excise Tariff. They claimed a refund on the grounds that central excise duty is only applicable to manufactured goods, and since the copper scrap was not a manufactured item, no central excise duty or additional customs duty should be levied. The appellant argued that any imported article is subject to customs duty under Section 12 of the Customs Act, 1962, and additional duty under Section 3 of the Customs Tariff Act, 1975. The appellant contended that the reference to central excise duty in notifications is merely for quantification purposes and that copper waste and scrap are included in Item 26A (1b) of the Central Excises and Salt Act. The taxable event is the import of the product, irrespective of whether it is manufactured in India. The Tribunal considered several precedents, including: - Bombay High Court in Commissioner of Sales Tax v. M/s. Aggarwal & Co.: Interpreting general terms in fiscal legislation to cover all forms and varieties of a commodity. - Supreme Court in Dunlop India Ltd.: Emphasizing the common parlance understanding of articles in trade and commerce. - Delhi High Court in Khandelwal Metal and Engineering v. Union of India: Clarifying that the taxable event for customs duty is the import of goods, not their manufacture, and additional duty is payable even if the like article is not manufactured in India. The Tribunal found that the imported copper scrap, although not a manufactured item, is commercially known and traded, thus falling under the excise tariff and liable to countervailing duty. 2. Eligibility for Exemption from Countervailing Duty: The respondents claimed exemption under Notification No. 33/81 and Notification No. 35/81. Notification No. 33/81 was found inapplicable as it is restricted to waste and scrap arising from products manufactured or produced in India and excludes items under 26A, 26B, 27, and 27A of the Central Excises and Salt Act. However, Notification No. 35/81 exempts waste and scrap of copper intended for use in the manufacture of chemicals. The Tribunal agreed that the imported copper scrap falls under this exemption, thus not chargeable to additional duty. Conclusion: The Tribunal upheld the Collector (Appeals) decision, agreeing that the imported copper scrap is not chargeable to additional duty, not because it is not a manufactured product, but due to the specific exemption under Notification No. 35/81. The appeal was dismissed, maintaining the exemption for the imported copper scrap used in chemical manufacturing.
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