1992 (4) TMI 145 - AT - Central Excise

Summary

Issues:
1. Appeal against demand of Central Excise duty on wastes and scraps of copper cleared without payment of duty under Rule 57F(2) and Notification 214/86 for conversion into brass sheets and strips.
2. Question of duty payment on waste and scrap arising out of input brass sheets/strips under MODVAT Credit.
3. Invocation of longer period under Sec. 11A for recovery of duty due to non-declaration and non-filing of classification list.
4. Applicability of exemption under Notification 172/84 to waste and scrap on which MODVAT Credit has been availed.

Analysis:
1. The appeal was filed against the order confirming a demand of Central Excise duty on wastes and scraps of copper cleared without payment of duty for conversion into brass sheets and strips. The Collector held that waste and scrap of copper arising from input brass sheets/strips could only be removed on payment of duty due to availing MODVAT Credit. The Department invoked a longer recovery period under Sec. 11A due to non-declaration and non-filing of classification list for the waste and scrap.

2. The appellant contended that the waste was removed on nil duty under Rule 57F(2) with permission and as per Notification 214/86. The appellant argued that availing MODVAT Credit on brass strips does not render the material non-duty paid. Citing precedents and departmental clarifications, the appellant asserted eligibility for exemption under Notification 172/84. The appellant also claimed the demand was time-barred as all required information was disclosed to the Department.

3. The Department reiterated arguments from a previous Tribunal decision regarding duty payment on waste and scrap under MODVAT Credit.

4. The Tribunal analyzed the Department's contention that availing MODVAT Credit rendered goods non-duty paid. Referring to a previous decision, the Tribunal held that goods do not lose duty-paid status upon availing credit, especially when full exemption is conferred. The Tribunal emphasized that restrictions on dutiability must align with exemption notifications. Considering the precedent and departmental clarifications, the Tribunal set aside the impugned order and allowed the appeal.