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Issues: Interpretation of exemption notification for lead scrap under Central Excise Rules and eligibility for duty exemption.
The judgment by S.P. Bharucha, J., addresses a case where the petitioners imported lead scrap for manufacturing lead and lead alloys, previously subject to countervailing duty. Following an amendment in the Central Excises and Salt Act in 1981, a notification exempted certain waste and scrap, including lead, from excise duty subject to conditions. The petitioners, after facing difficulties in clearance post-amendment, sought refund of duty paid between March 1981 and the date of their application. The court examined the interpretation of the exemption notification, emphasizing that the lead scrap must arise from products on which excise or additional duty has been paid to qualify for exemption. The court rejected the argument that the lead scrap imported by the petitioners, being obsolete materials, did not require duty payment, stating that such argument was raised for the first time in the petition and lacked a decision by the authorities. The judgment cited a Supreme Court case to clarify that duty is levied on the import of goods, not on their manufacture, and that duty liability is not contingent on the goods being produced in India. The court dismissed the petition, holding that the lead scrap imported did not meet the exemption criteria, and upheld the duty liability, concluding with the dismissal of the petition and imposition of costs.
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