2000 (8) TMI 176 - AT - Central Excise

Summary

Issues:
- Whether the exemption from payment of Central Excise duty under Notification No. 202/88-C.E. is available to wire rods & bars of iron and steel manufactured from old M.S. Scrap containing broken pieces of various items.

Analysis:
1. The appeal filed by M/s. Mohan Steels Ltd. raised the issue of eligibility for exemption from Central Excise duty under Notification No. 202/88-C.E. for products made from re-rollable material purchased from kabadis. The Appellants claimed the exemption based on the Explanation to the Notification, which deems all stocks of inputs in the country, except those clearly recognized as non-duty paid, as inputs on which duty has already been paid. The Tribunal's decision in Vivek Re-Rolling Mills v. CCE was cited to support the treatment of old and used re-rollable scrap as duty paid.

2. The Appellants argued that the old and used angles/sections retained their duty paid character, making them eligible for the exemption. They contended that the demand for excise duty was time-barred and highlighted the divergent views among Commissionerates regarding the treatment of old and used materials as inputs under the Notification. The Appellants also emphasized their compliance with the Notification requirements, as evidenced by their classification list and communication with the Range Officer.

3. The Department, represented by the ld. DR, placed the onus on the Appellants to prove that the inputs were duty paid. They argued that the discarded items, such as old and used angles/sections, were not excisable and referenced relevant case law to support their position. The Department raised concerns about the duty paid character of the inputs, especially regarding the nature of the re-rollable material purchased from kabadis.

4. The Tribunal considered both parties' submissions and examined the evidence presented. It noted the Collector's findings that the re-rollable material purchased by the Appellants had not undergone any conscious manufacturing activity and had not been duty paid. The Tribunal held that the Appellants failed to provide evidence of the inputs being duty paid, as required by the Notification, and upheld the Collector's decision that the extended period of limitation was applicable due to the Appellants' non-disclosure of crucial information regarding the nature of the inputs.

5. In conclusion, the Tribunal rejected the appeal, ruling that the Appellants were not eligible for the exemption from duty under Notification No. 202/88-C.E. The decision was based on the non-duty paid character of the inputs, the Appellants' failure to disclose vital information, and the invocation of the extended period of limitation. The Tribunal upheld the Collector's findings and emphasized the importance of disclosing relevant details about the inputs to determine their duty paid status.