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2004 (5) TMI 70 - SC - Central ExciseDutiability of Waste and scrap - Bar of Limitation - exemption under Notification No. 74/65-C.E. dated 1-5-1965 and under Notification No. 119/66-C.E. dated 16-7-1966 - Held that - Unless the scrap and waste are goods that had been used can be demonstrated to have been a duty paid goods, it cannot be assumed that they are so, particularly when it cannot be said with certainty that all scrap and waste material used has been subject to excise duty earlier. The waste and scrap was dutiable only when it is a manufactured product and not otherwise. The object of exemption being to avoid cascading effect in the matter of payment of excise duty. Classification list filed by the appellant dated 25-3-1983 was not approved and a show cause notice was issued on 23-7-1984. The approval was accorded only on 15-9-1984. As there was no approval of the classification list and there was no final assessment, we think, in the circumstances of the case the bar of limitation would apply only from the date of the finalization of the classification - Decided against assessee.
Issues:
1. Entitlement to claim exemption under specific notifications for various copper products. 2. Interpretation of conditions for exemption under relevant notifications. 3. Validity of show cause notices issued for exemption claims. 4. Determination of duty payment on raw materials for exemption eligibility. 5. Application of limitation period for classification list approval. Analysis: 1. The appellant claimed exemption under specific notifications for manufacturing copper products falling under different tariff items using specified raw materials. The authorities did not accept the appellant's claim, leading to a dispute regarding entitlement to exemption under Notification No. 74/65-C.E. and Notification No. 119/66-C.E. The appellant argued for exemption based on the use of raw materials as prescribed under the notifications. 2. The Tribunal held that the exemption was subject to the condition that raw materials used in manufacturing the final products should be duty paid. The appellant contended that scrap purchased from the open market should be deemed duty paid. However, the authorities emphasized that all waste and scrap are not excisable unless manufactured into a product subject to excise duty. The Tribunal's view was deemed appropriate to prevent a cascading effect in excise duty payment. 3. Show cause notices were issued to the appellant challenging the exemption claims made under specific notifications. The appellant raised concerns about the timing of the notice, issued sixteen months after filing the classification. However, the validity of the notice issuance was not deemed a significant issue in the judgment. 4. The authorities emphasized the importance of demonstrating that scrap and waste used as raw materials were duty paid goods to qualify for exemption. The appellant's argument that scrap purchased from the open market should be considered duty paid was rejected. It was clarified that waste and scrap are dutiable only when manufactured into a product subject to excise duty. 5. Regarding the limitation period, it was noted that the classification list filed by the appellant was not approved until a later date, leading to a show cause notice being issued. The judgment clarified that the limitation period would apply from the finalization of the classification, dismissing the appellant's reliance on previous decisions to support a different interpretation of the limitation issue. Ultimately, the appeal was dismissed based on the above considerations.
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