1995 (9) TMI 154 - AT - Central Excise

Summary

Issues:
1. Entitlement for exemption under Notification 119/66-C.E. for copper and brass products.
2. Interpretation of the term "copper in any crude form" under Tariff Item 26A(1).
3. Eligibility for exemption based on the raw materials used in manufacturing copper rods.
4. Applicability of Circular 2/3/66-CX. 3, dated 24-8-1968, and Circular 138/8/81-CX. 4, dated 24-2-1982.

Analysis:
1. The appeal addressed whether the respondents were entitled to exemption for products like "Copper and Brass round rods, hexagonals, squares and rectangulars not less than 10mm in thickness" under Notification 119/66-C.E. The dispute arose from the use of old scrap, copper wire bars, zinc, tin, etc., in manufacturing these products, as per the classification list 70/81 effective from 1-6-1981. The Asstt. Collector rejected the claim, stating that the raw materials used did not align with the notification's specified materials. However, the Collector (Appeals) accepted the claim based on a circular clarifying that wire bars are deemed to be 'bars' under Tariff Item No. 26A(1), making the products eligible for exemption.

2. The Revenue argued that copper rods were not exclusively made from copper scrap or copper in any crude form, as they were manufactured using a combination of copper scrap, wire bars, zinc, and tin. They contended that since the products were not made solely from materials listed in Notification 119/66, the exemption did not apply. Conversely, the respondent's counsel argued that the products contained copper in addition to other components, making them eligible for exemption under the notification. They asserted that copper wire bars were a crude form of copper falling under Item IV of the notification's list and referenced Circular 2/3/66-CX. 3, dated 24-8-1968, to support their claim.

3. The Tribunal analyzed the submissions and found that the products were indeed manufactured using old scraps and copper wire bars. They agreed with the Collector that wire bars should be considered as 'bars' falling under the definition of copper in any crude form under Tariff Item 26A(1). The Tribunal upheld the Collector (Appeals)'s decision, emphasizing that the products' composition met the criteria for exemption under Notification 119/66. They also referenced Circular 138/8/81-CX. 4, dated 24-2-1982, which allowed exemption for products with predominant copper content even if other metals were added.

4. Consequently, the Tribunal dismissed the department's appeal and disposed of the cross objections filed by the party accordingly. The decision was based on the products' compliance with the notification's provisions, the interpretation of 'copper in any crude form,' and the circulars issued by the Central Board of Excise and Customs supporting the party's eligibility for exemption.