2018 (3) TMI 831 - AT - Central Excise

Levy of excise duty - intermediate goods or waste/ scrap - whether untrimmed sheets/circles of Brass manufactured by the respondents were leviable to Central Excise Duty as an intermediate product arising in the course of manufacture of trimmed product and waste and scrap attracting Nil rate of duty being captively consumed or whether the said untrimmed sheets of brass were leviable to Central Excise duty? Held that - Undisputedly untrimmed sheets of brass were being used in the manufacture of utensils and handicrafts and, therefore, they were attracting Nil rate of duty and, therefore, the question of applicability of said N/N. 67/95 did not arise - demand do not sustain. Appeal dismissed - decided against Revenue.

Summary

Issues: Determination of central excise duty on untrimmed sheets/circles of Brass used in manufacturing utensils and handicrafts.

Analysis:
1. The appeals were filed by Revenue regarding the central excise duty on untrimmed sheets/circles of Brass used in manufacturing utensils and handicrafts. The issue was whether these untrimmed sheets of Brass were leviable to Central Excise Duty or were captively consumed waste and scrap attracting Nil rate of duty. The learned Commissioner (Appeals) relied on a Supreme Court ruling stating that all goods of Brass intended for use in the manufacture of utensils and handicrafts attract Nil rate of duty. Based on this, the Commissioner passed orders in favor of the respondents.

2. The Revenue contended that there were two final products from the untrimmed sheets of Brass - trimmed sheets and scrap/waste. They argued that the untrimmed sheets of Brass used as inputs for these final products did not qualify for the benefit of an exemption for captive consumption under Notification No. 67/1995. After hearing both parties and examining the records, the Tribunal referenced the Supreme Court ruling which clarified that Brass goods used in the manufacture of utensils and handicrafts attract Nil rate of duty.

3. The Tribunal concluded that since the untrimmed sheets of Brass were used in the manufacture of utensils and handicrafts, they were indeed attracting Nil rate of duty. Therefore, the applicability of Notification No. 67/95 for exemption did not arise in this case. Consequently, the Tribunal found no merit in the appeals filed by Revenue and rejected them. The Cross Objections were also disposed of accordingly.