1996 (12) TMI 205 - AT - Central Excise

Scrap - Copper waste and scrap purchased from market - Interpretation of statute - Exemption notification - Copper waste and scrap

Summary

Issues: Interpretation of exemption notification no. 74/65-C.E. dated 1-5-1965 (as amended) regarding concessional rate of duty for copper plates, sheets, and circles manufactured from waste and scrap of copper.

1. The appeal concerned the interpretation of exemption notification no. 74/65-C.E. dated 1-5-1965 (as amended) regarding the eligibility for the concessional rate of duty for copper plates, sheets, and circles manufactured from waste and scrap of copper purchased from the open market. The appellants claimed exemption under the said notification, but the show cause notice alleged ineligibility due to lack of proof of duty payment for the waste and scrap.

2. The appellant argued that before 1-3-1981, waste and scrap of copper were deemed duty paid when purchased from the open market under a different tariff entry. Despite a subsequent change in the tariff entry, the exemption notification did not reflect this change. The appellant cited relevant tribunal decisions to support their interpretation of the deeming provisions under the notification.

3. The respondent contended that the exemption notification must be strictly construed, and the deeming provisions only applied to specific sub-items of the tariff entry, not including waste and scrap classified under sub-item (1b) of Item No. 26A.

4. The Tribunal analyzed the exemption notification and noted that the deeming provisions applied to stocks falling under sub-item (1) or sub-item (1a) of Item No. 26A, but not to waste and scrap classified under sub-item (1b). The Tribunal emphasized that the deeming provisions could not be extended beyond the specific sub-items mentioned in the explanation.

5. The Tribunal explained that the deeming provisions were exceptions to the general rule requiring proof of duty payment. As waste and scrap were not covered under the specific sub-items mentioned in the notification during the relevant period, the deeming provisions did not apply to the appellants' situation. The Tribunal upheld the adjudicating authority's decision.

6. The Tribunal further clarified that the deeming provisions applied only to excisable goods for which duty payment proof was lacking. Since the waste and scrap obtained by the appellants were not even excisable, the deeming provisions did not apply. Reference was made to a Larger Bench decision where deemed credit was not allowed for wholly duty-exempt inputs.

7. The Tribunal distinguished the cited tribunal decisions by the appellant, emphasizing that the deeming provisions in the exemption notification were limited to specific sub-items. The Tribunal rejected the argument that waste and scrap should be treated as duty paid unless proven otherwise, as the notification did not support such a general proposition.

8. The Tribunal addressed the non-applicability of other notifications cited by the appellant and found that the goods in question were not covered by those notifications. Ultimately, considering all facts and circumstances, the Tribunal found no merit in the appeal and rejected it.