1996 (7) TMI 229 - AT - Central Excise

Summary

Issues:
Admissibility of exemption to steel wires made from wire rods during a specific period.

Analysis:
The appeal concerned the admissibility of exemption to steel wires made from wire rods between 10-8-1980 to 23-10-1980. The appellants received steel wire rods from their factory and claimed exemption under Notification No. 206/63. The department denied the exemption, stating that the wires were made from wire rods and not from billets as required by the notification. The appellants argued that the wire rods were essentially made from billets and referred to a Tribunal decision in their favor. They also cited a CBEC circular supporting their position. The department contended that the CBEC circular was not binding and that the wires were not manufactured from billets.

The Tribunal analyzed the issue and held that wire rods, being manufactured from billets, could be considered as intermediate products leading to the production of steel wires from billets. The Tribunal clarified that steel wires are never directly made from billets but go through the process of conversion from billets to rods to wires. The Tribunal also noted an amendment to the notification that allowed exemption for steel wires made from other iron or steel products falling under the relevant category. Referring to a Board's instruction and a previous Tribunal decision, the Tribunal emphasized that the origin of the wire could be traced back to the billet even if wire rods were involved in the process.

The Tribunal highlighted that CBEC had accepted its decision in a previous case and had not filed an appeal in the Supreme Court. Considering the precedent set by the Tribunal and the acceptance of its decision by CBEC, the impugned order was set aside, and the appeal was allowed.