1991 (7) TMI 225 - AT - Central Excise

Summary

Issues:
1. Interpretation of exemption from payment of Central Excise duty for Waste and Scrap of Copper and Aluminium.
2. Eligibility for MODVAT credit for Waste of Copper and Aluminium.
3. Burden of proof regarding the duty paid nature of inputs.
4. Definition of "Non-duty paid" and its relation to "Exempted" goods.
5. Application of benefit explanations in Notifications to the Applicant.
6. Denial of Deemed Credit for Waste and Scrap of Copper and Aluminium.

Analysis:

Issue 1:
The Tribunal examined the exemption under Notification No. 172/84 and 182/84 for Waste of Copper and Aluminium. It was found that the exemption was unconditional for these materials if made from duty-paid Copper and Aluminium. The Tribunal emphasized that the exemption was total and unconditional, allowing the Department to consider them as non-duty paid and deny MODVAT credit.

Issue 2:
The dispute revolved around the availability of deemed MODVAT credit for Waste of Copper and Aluminium under Rule 57G(2) of the Central Excise Rules. The Government's order allowed deemed MODVAT credit for these materials. However, the Department viewed them as non-duty paid due to the exemption under Notifications 172/84 and 182/84, thus disqualifying them for MODVAT credit.

Issue 3:
The burden of proof regarding the duty paid nature of inputs was a key point of contention. The Tribunal clarified that the burden lay on the Applicant to prove the duty paid status of inputs, contrary to the view held by the North Regional Bench of CEGAT in a previous case.

Issue 4:
The Tribunal delved into the interpretation of "Non-duty paid" and its relation to "Exempted" goods. It distinguished between different notifications and their conditions for availing exemptions, highlighting that certain exemptions were unconditional, leading to the goods being recognized as non-duty paid.

Issue 5:
The Tribunal addressed the Applicant's plea for extending the benefit of explanations contained in the Notifications. It was noted that the Tribunal did not extend these benefits to the Applicant, indicating a strict interpretation of the exemption provisions.

Issue 6:
Regarding the denial of Deemed Credit for Waste and Scrap of Copper and Aluminium, the Tribunal referred the question of law to the Hon'ble High Court for decision. The question focused on whether the denial of Deemed Credit under the Government of India's order was legally justified, considering the divergent views of different Tribunal Benches on the matter.