1997 (7) TMI 296 - AT - Central Excise

Summary

Issues:
Applicability of exemption Notification No. 208/83-C.E., dated 1-8-1983 to final products made from inputs received on nil duty gate passes.

Detailed Analysis:

1. Background of the Case:
- Five appeals filed by M/s. Maharashtra Steel Industries against the order-in-original by the Additional Collector of Central Excise, Aurangabad.
- Additional Collector confirmed a demand, imposed penalties on the company and four individuals.

2. Contention of Parties:
- Appellant's consultant argued that nil duty on inputs should be considered as payment of duty, making final products eligible for exemption.
- Respondent's representative stated that nil duty on inputs does not qualify as duty payment for exemption under Notification No. 208/83-C.E.
- Respondent argued that subsequent amendment clarified that exemption is not available for goods cleared on nil duty gate passes.

3. Interpretation of Notification No. 208/83-C.E.:
- The notification required final products to be made from inputs on which duty had already been paid.
- Appellants received inputs on nil duty gate passes, but argued that the term "already paid" should be interpreted broadly.
- Referring to a High Court decision, the consultant argued that the term "already paid" could mean "contracted to be paid or ought to have been paid."

4. Precedents and Tribunal Decisions:
- Patna High Court and Tribunal decisions supported the view that nil duty could be considered as duty payment.
- Tribunal observed that appropriate duty includes nil duty in certain cases.

5. Amendment and Retrospective Effect:
- Subsequent amendment to the notification excluded goods cleared on nil duty from exemption benefits.
- Appellant argued against giving retrospective effect to the amendment to the disadvantage of the assessee.

6. Decision and Rationale:
- Tribunal disagreed with the Additional Collector's view and allowed all five appeals.
- Emphasized that the benefit under Notification No. 208/83-C.E. should not be denied solely based on goods being cleared on nil duty gate passes.
- Noted that the amendment denying benefits for goods cleared on nil duty gate passes was not applicable to the period in question.
- Concluded that the final products were eligible for exemption despite inputs being received on nil duty gate passes.

This detailed analysis outlines the key arguments, legal interpretations, precedents, and the final decision of the Appellate Tribunal CEGAT, New Delhi regarding the applicability of an exemption notification to final products made from inputs received on nil duty gate passes.