1997 (7) TMI 404 - AT - Central Excise

Summary

Issues: Whether Iron and Steel products purchased by the respondents from traders in the market have availed the benefit of Notification 208/83 and are recognizable as non-duty paid.

In this judgment by the Appellate Tribunal CEGAT, CALCUTTA, the main issue revolved around whether Iron and Steel products purchased by the respondents and appellants from traders in the market have availed the benefit of Notification 208/83 and are recognizable as non-duty paid. The lower appellate authority in one case held that goods purchased by the respondents were not clearly recognizable as non-duty paid, as no evidence was produced by the Revenue to show that the goods were fully exempted under any Notification or chargeable to nil rate of duty. However, in the other case, the authority held that since the inputs were covered by Notification 208/83, they were to be treated as non-duty paid, denying the benefit of Modvat credit to the appellants.

The Appellate Tribunal considered the arguments presented by both sides. The ld. SDR argued that the benefit of Notification 208/83, being an exemption, should have been availed by the manufacturer, and since the redrawn wire was exempt from duty under the notification, Modvat credit was inadmissible. On the other hand, the ld. Advocate relied on a judgment from a Larger Bench, emphasizing that the mere existence of an exemption notification does not automatically mean the input is wholly exempt from duty. The Tribunal noted that in cases of conditional exemption, all conditions must be satisfied for the inputs to be considered non-duty paid.

After careful consideration, the Tribunal agreed with the ld. Advocate's submissions. They held that the evidence must be produced by the department to show that the conditions of exemption have been met, as per the Larger Bench's ruling. Since such evidence was lacking in the Appeals under consideration, the Tribunal rejected the Revenue's Appeal and allowed the Appeal of M.S. Industries & Forgings, providing consequential relief to the appellants. The judgment emphasized the importance of evidence and compliance with exemption conditions in determining whether products are non-duty paid under specific notifications.