2007 (9) TMI 163 - AT - Central Excise

MS Bars mfd. out of non-duty paid input ship breaking scrap Duty sought to be levied on MS Bars As dept. could not prove that ship breaking scrap is non-duty paid, duty can t be levied on MS Bars so clearance of MS Bars without paying duty under Exem. Not. 208/83 can not be challenged by dept.

Summary

Issues:
Dutiability of M.S. Bars cleared without payment of Central Excise duty on the assumption of exemption under Notification No. 208/83 from 1.4.1983 to 30.9.1985.

Analysis:
The issue in this case revolves around the dutiability of M.S. Bars cleared without paying Central Excise duty, assuming exemption under Notification No. 208/83 from 1.4.1983 to 30.9.1985. The Ld. SDR argues that the scrap used to manufacture M.S. Bars was ship breaking scrap, which was exempt from duty during that period. Thus, the M.S. Bars should be considered dutiable since the scrap was non-duty paid. The Ld. Advocate for the respondents, however, points out that the show cause notice lacks evidence to prove that the ship breaking scrap was non-duty paid. He highlights a previous order where a similar appeal by the Revenue was dismissed due to lack of evidence. The Tribunal notes that the show cause notice against the respondent lacks evidence to support the claim that duty was not paid on the ship breaking scrap used. The Tribunal also references a previous order where the Commissioner concluded that the inputs were not clearly identifiable as non-duty paid, following which the Tribunal upheld the Commissioner's decision.

The Tribunal carefully considers the arguments presented by both sides and reviews the records. It observes that the show cause notice against the respondent does not provide any evidence to support the claim that duty was not paid on the ship breaking scrap used in manufacturing M.S. Bars. Additionally, the Tribunal references a previous order where a similar issue was addressed, and it was concluded that the burden of proof lies with the Revenue to establish that the inputs used were not duty paid. The Tribunal upholds the decision of the co-ordinate Bench, which favored the respondent, as it found no reason to disagree with the previous decision in the absence of contradictory evidence.

In conclusion, the Tribunal, following the precedent set by the previous decision, holds that the impugned order is correct, and the appeal filed by the Revenue is rejected. The Tribunal emphasizes the importance of the Revenue proving that the inputs used by the respondents were not duty paid, as established in previous judgments, and finds in favor of the respondent based on the lack of evidence provided by the Revenue to support their claim.