1990 (4) TMI 175 - AT - Central Excise

Summary

Issues:
Interpretation of Rule 56B vis-a-vis Rule 9 of the Central Excise Rules, 1944.

Analysis:
The case involved a question of law regarding the entitlement of the Petitioner to permission under Rule 56B of the Central Excise Rules, 1944 for the movement of bare copper wire without payment of duty to another factory for insulation and then bringing it back for further processes. The Tribunal noted that the company did not have sufficient insulation capacity for bare copper wires and sought permission for this process. The Collector, however, declined permission citing Rule 9 of the Central Excise Rules, which mandates payment of duty before removal of excisable goods for further use. The Tribunal agreed with the applicants that the issue raised was a question of law involving the interpretation of Rules 56B and 9. The Tribunal's findings emphasized that Rule 9 requires duty payment for excisable goods before removal for any purpose, and Rule 56B should be construed harmoniously with Rule 9. The Tribunal referred to a previous decision to support its interpretation that removal of finished excisable goods for the manufacture of a different excisable goods without duty payment violates Rule 9.

The Tribunal's analysis highlighted that Rule 56B does not make a distinction based on the heading or sub-heading of the goods, but it must be read in conjunction with Rule 9. The Tribunal emphasized that duty payment is required when excisable goods are removed for further processes or manufacture of other commodities. The Tribunal referred to a previous decision where it was held that removal of one excisable article for the manufacture of another without duty payment violates Rule 9. The Tribunal clarified that the Collector cannot permit the removal of finished products for the manufacture of other finished products without duty payment, even if the manufacturer is the same. The Tribunal agreed that semi-finished goods relate to subsequent manufacturing processes, but converting them into different excisable goods would not be permissible under Rule 56B.

In conclusion, the Tribunal referred the question raised by the applicants to the Hon'ble High Court of Madhya Pradesh, Jabalpur for their opinion on the interpretation of Rule 56B vis-a-vis Rule 9 of the Central Excise Rules, 1944. The case underscores the importance of duty payment for excisable goods before their removal for further processing or manufacture of different excisable goods, as mandated by Rule 9.