2007 (12) TMI 35 - AT - Central Excise

On the waste and scrap generated in between, which are entirety used within the factory for recycling, the appellants have claimed exemption under Notification No. 89/95-C.E - contention of the Revenue that this Notification is not applicable as appellants manufactured some dutiable wagons held that exemption is available - moreover appellants have proportionately paid the duty on portion of waste and scrap, which are used in respect of dutiable wagons

Summary

Issues:
Interpretation of Notification No. 89/95-C.E. for exemption on waste and scrap used in manufacturing processes for both exempted and dutiable products.

Analysis:
The appeal pertains to M/s. Burn Standard Co. Ltd., a Public Sector Unit, seeking waiver of pre-deposit based on the interpretation of Notification No. 89/95-C.E. regarding the exemption on waste and scrap used in their manufacturing processes. The company uses duty-paid iron and steel products to manufacture exempted Railway Wagons, generating waste and scrap that are recycled to manufacture castings, further utilized in wagon production. While most wagons are supplied to Railways exempt from excise duty, a small fraction is sold to others with duty payment. The Revenue contends the notification doesn't apply as the company manufactures some dutiable wagons. However, the company argues they proportionately pay duty on waste used for dutiable wagons. The Tribunal, after hearing both sides, opines that the appellants have a strong case on merits favoring them.

During the final hearing, no contrary arguments were presented by the Department to challenge the Tribunal's prima facie view. Consequently, the Tribunal upholds its initial view, finding in favor of the appellants and setting aside the impugned order, ultimately allowing the appeal. The decision highlights the importance of correctly interpreting and applying statutory notifications in excise matters, ensuring fair treatment for manufacturers dealing with both exempted and dutiable products.