2016 (5) TMI 1204 - AT - Central Excise

Entitlement for Nil rate of duty in terms of Notification No.180/88-CE dt. 13.5.1988 - Aluminium products manufactured out of waste and scrap of Aluminium purchased from open market - Held that - the waste and scrap was procured from open market and not from any particular manufacturer. The goods procured from open market cannot be related to a particular manufacturer. It cannot be presumed that the said waste and scrap has originated without payment of duty. Therefore, it has to be accepted that the waste and scrap used by the appellant for manufacture of their final product is duty paid accordingly, the condition of notification No. 180/88-CE stand fulfilled. Therefore the appellant is entitled for the said exemption notification by applying the decision of Tribunal in the case of Baroda Ferro Alloys & Ind. Ltd. Vs. Commissioner of C. Ex., Vadodara 1999 (11) TMI 385 - CEGAT, MUMBAI . - Decided in favour of appellant

Summary

Issues:
Whether the appellant is entitled to exemption under Notification No. 180/88-CE for manufacturing Aluminium products from waste and scrap procured from the open market.

Analysis:
The appeal challenged the rejection of the appellant's claim for exemption under Notification No. 180/88-CE by the Commissioner (Appeals) Central Excise, Mumbai-I. The appellant, engaged in manufacturing Aluminium based alloy ingots, cleared goods at a Nil rate of duty from October 1993 to March 1994 under certain conditions. The dispute arose when the Revenue alleged that since the waste and scrap used were exempted under Notification No. 182/84-CE, the final products were not eligible for the exemption under Notification No. 180/88-CE.

The appellant contended that the waste and scrap procured from the open market were not necessarily non-duty paid as presumed by the Revenue. They argued that the exemption should not have been denied solely based on the assumption that all waste and scrap were non-duty paid. The appellant relied on various judgments to support their claim, emphasizing the need for specific evidence to establish non-duty paid status.

On the contrary, the Revenue argued that the general exemption under Notification No. 182/84-CE for waste and scrap implied that all such materials were non-duty paid. They maintained that goods manufactured from such exempted waste and scrap were not eligible for further exemption under Notification No. 180/88-CE.

After considering both sides' submissions, the Tribunal analyzed the conditions of Notification No. 182/84-CE and the Explanation provided therein. The Tribunal noted that the notification was conditional and required fulfillment of specific criteria for exemption. It clarified that the presumption of all waste and scrap being non-duty paid was not universal and depended on the evidence presented.

Referring to previous judgments, including Commissioner Of Central Excise, U.P. Aluminium Indus. and Utkal Automobiles Ltd., the Tribunal concluded that the appellant was entitled to the exemption under Notification No. 180/88-CE. The Tribunal highlighted the need for clear evidence to establish non-duty paid status and rejected the Revenue's blanket presumption. Consequently, the impugned order was set aside, and the appeal was allowed in favor of the appellant.

Therefore, the Tribunal ruled in favor of the appellant, emphasizing the importance of specific evidence to determine the duty status of waste and scrap used in manufacturing processes, ultimately granting the exemption under Notification No. 180/88-CE for the appellant's final products.