1988 (8) TMI 288 - AT - Central Excise

Summary

Issues:
Interpretation of Exemption Notification No. 201/79-Central Excises dated 4-6-1979 regarding the set-off of duty paid for goods falling under Tariff Item 68 used in the manufacture of other excisable goods.

Detailed Analysis:

1. The appellant Collector contended that the use of duty paid Burnt/Sintered Dolomite in the manufacture of Steel Ingots by the respondents did not qualify for the set-off under Exemption Notification No. 201/79-CE as Dolomite was used for protecting the walls of the furnace, not directly in the manufacture of Steel Ingots. The department's representative cited a Supreme Court judgment and argued that Dolomite's function was only to seal crevices in the refractory walls, not a process directly employed in manufacturing Steel Ingots.

2. The respondents' consultant argued that the criterion for determining the eligibility for set-off should be whether Dolomite was essential for manufacturing Steel Ingots. He emphasized that the definition of 'manufacture' under Section 2(f) of the Central Excises & Salt Act, 1944, should include incidental and ancillary processes. The consultant explained the process of Dolomite usage in the furnace, highlighting its essential role in the steel-making process, where Dolomite dissolved and became part of the molten metal and slag.

3. The Tribunal carefully considered the manufacturing process and Dolomite's role in the steel-making furnace as explained by the respondents' consultant. It was concluded that Dolomite was directly employed in steel-making and was essential for the process. The Tribunal noted that Steel Ingots could not be manufactured without Dolomite in the furnace, as it prevented damage during scrap melting. The Tribunal found that Dolomite, being a part of the molten metal and slag, fell within the scope of the un-amended Notification No. 201/79-CE, which allowed set-off for all Item 68 goods used in the manufacture of excisable goods. Therefore, the Tribunal upheld the Collector (Appeals) decision and dismissed the appeals.