1998 (8) TMI 268 - AT - Central Excise

Summary

Issues: Availability of deemed credit on iron and steel items

Analysis:

1. Background of the Issue:
The case involved eight appeals concerning the availability of deemed credit on iron and steel items. The appeals were heard together due to the common subject matter.

2. Orders Governing Deemed Credit:
The issue revolved around two government orders: Order No. 332/30/87-TRU dated 2-11-1987 and its amendment, Order No. 342/1/88-TRU dated 20-5-1988. The latter extended deemed credit to additional sub-headings beyond Chapter Heading 72.06.

3. Appeals Timeline:
The first appeal, E/1488/96, related to the period covered by the initial order, while the remaining seven appeals pertained to the period after the amendment. The subsequent orders did not alter the fundamental scheme.

4. Adjudication Process:
The Assistant Collector adjudicated several show cause notices, with some cases remanded by the Collector (Appeals) for reconsideration of specific issues related to the nature and classification of the goods.

5. Initial Adjudication Outcome:
In Order-in-Original No. 55/91, the Assistant Collector dropped proceedings due to insufficient evidence regarding the duty status of the goods, without addressing the exact nature of the goods involved.

6. Department's Appeals:
The department challenged these orders through appeals, arguing that deemed credit was improperly allowed on semi-finished products not covered by the government orders.

7. Order-in-Appeal Findings:
The Commissioner in the Order-in-Appeal set aside the original order, concluding that since the goods did not fall under the specified headings in the deemed credit orders, the credit was not permissible.

8. Consultant's Arguments:
The consultant for the appellants contended that the goods were semi-finished and aligned with Heading 7207.90 post the tariff alignment with HSN. He emphasized that the goods were eligible for deemed credit under the amended order.

9. Tribunal's Decision:
The Tribunal, after considering arguments from both sides, found that the goods were indeed semi-finished and classified under Heading 7207.90. Deemed credit was allowed based on the alignment with the government order and the duty status of the goods.

10. Conclusion:
The Tribunal upheld the appeals, except for E/1488/96, where deemed credit was not applicable pre-alignment with HSN. The decision was based on the nature of the goods and their alignment with the relevant tariff headings.

This detailed analysis highlights the progression of the case, the arguments presented, and the ultimate decision by the Tribunal regarding the availability of deemed credit on iron and steel items.