2008 (2) TMI 197 - AT - Central Excise

Appellant claim that they had earlier brought damaged cement into their factory for reprocessing u/r 96-ZV so they were entitled to clear equal quantity of reprocessed cement duty free u/r 96-ZV - If the damaged is mixed with good cement & subjected to grinding, then the claim of recovery of cent percent by weight of damaged cement is possible - since original consignment has been cleared on payment received for the purpose of reprocessing hence appellant is eligible for the benefit u/r 96-ZV

Summary

Issues:
- Interpretation of Rule 96-ZV of erstwhile Central Excise Rules, 1944 regarding reprocessing of damaged cement without payment of Central Excise duty.
- Correct procedure for receiving damaged cement and entitlement to clear reprocessed cement duty-free.
- Assessment of the claim of recovery of 100% damaged cement by weight.
- Applicability of Chemical Examiner's report in determining the reprocessability of damaged cement.

Analysis:
The case involved an appeal against the order of the Commissioner (Appeals) regarding the clearance of damaged cement without payment of Central Excise duty under Rule 96-ZV. The appellant claimed that they reprocessed the damaged cement and were entitled to clear an equal quantity of reprocessed cement duty-free. The original authority and the Commissioner (Appeals) had previously considered the issue and confirmed the duty demand, with a penalty imposed on the appellant.

The appellant argued that they followed the reprocessing procedure by grinding the damaged cement and disputed the relevance of the Chemical Examiner's reliance on a tour note from another company. The Chemical Examiner's report mentioned that the cement had setting properties, but the Tribunal noted that this did not mean the cement had already set and was irreversibly damaged. The Tribunal found the reprocessing claimed by the appellant feasible, stating that if the damaged cement was mixed with good cement and ground, the claim of recovering 100% by weight was possible. The Tribunal held that the appellant was eligible for the benefit under Rule 96-ZV.

In the final decision, the Tribunal allowed the appeal, providing consequential relief to the appellant. The Tribunal's analysis focused on the correct interpretation of Rule 96-ZV, the procedure for reprocessing damaged cement, the credibility of the claim of recovering 100% damaged cement, and the applicability of the Chemical Examiner's report in determining the reprocessability of the damaged cement. The judgment clarified that the nature of reprocessing claimed by the appellant was valid, leading to the allowance of the appeal with consequential relief for the appellant.