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TMI Blog1989 (6) TMI 183X X X X Extracts X X X X X X X X Extracts X X X X ..... teels Ltd., Polancha; Miss Roll from M/s. Andhra Steel Corp., Vizag and inputs received by them from ship breaking units like M/s. Vizag Shipping Metal Processors, Vizag and M/s. Ushodaya Shipping Pvt. Ltd., Vizag. The respondents during the various periods of the year 1984 had purchased inputs from various suppliers stated above for manufacture of their product. 2. The officers of the appellants, on their routine check, found that the materials purchased by the respondents had not been duty paid and hence issued three separate show cause notices to the respondents. The respondents submitted their explanation to the said show cause notices and also appeared before the Assistant Collector, Kakinada and had put forth their case accordingly. The Assistant Collector after examining their case in detail, held that the inputs from various suppliers, other than those supplied by the ship breaking units namely, M/s. Vizag Shipping Metal Processors, Vizag and M/s. Ushodaya Shipping Pvt. Ltd., Vizag, were not covered under the Notification No. 208/83 dated 1-8-1983 and by his three separate orders, called upon the respondents to pay the excise duty to the extent of materials purchase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty paid specified inputs mentioned in Col. 2 at Serial No. 2 of the table to the notification. The specified inputs mentioned therein are sub-item 6(ii) ingots, blocks, lumps and similar form of steel; 7(ii) flooms, billets, lumps and sheet bars (including tin plate bars and hoe bars); 8 pieces roughly shaped by rolling or forging form of steel not elsewhere specified; 9(ii) (11) Angles, shapes and sections other than slotted angles and slotted channels, rolled, forged, extruded, formed, finished sheet piling or iron or steel whether or not drilled punched or made from assembled elements. Another condition for the eligibility of the exemption contained therein is that such final products are made from inputs on which duty of excise leviable under said Act or the additional duty leviable under the Customs Tariff Act, 1975 (51 of 1975) has already been paid. 5. The records of the respondents disclosed that the description of the materials received from M/s. Vizag Shipping Metal Processors; M/s. Ushodaya Shipping Pvt. Ltd., Vizag and M/s. P.S. Enterprises, Vizag are given as (i) Re-rollable plate scrap; (ii) Un-serviceable ship scrap; (iii) M.S. fabricated rejects and (iv) M. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid stock which disentitled the respondents from the duty exemption benefit under the Notification No. 208/83-C.E., dated 1-8-1983. The customs duty is paid on the ship and no additional duty is paid on scrap arising from ship breaking. The respondents have not produced any documents/information leading to the nature of payment of duty on the inputs and hence the appeals are to be allowed and the order of the Assistant Collector to be restored. 8. Shri V.M. Doiphode, the learned Departmental Representative appearing for the Department, reiterated the grounds of appeal and further argued that the duty has not been paid on scrap. The respondents have purchased scrap from the ship breaking units. The custom duty has only been paid on the ship and not on the scrap arising as a result of ship breaking. The activity of ship breaking is a manufacture and on the scrap received from such ship breaking is an input and duty is leviable on it. The custom duty, if at all, paid on the ship before breaking it, cannot be said to have been paid on scrap retrieved from such ship-breaking. The scrap has not been purchased from the market and hence is not entitled for exemption. 9. Shri P.S. Bedi, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... examined the contentions and gone through the records. The dispute in all the three appeals is whether the benefit of Notification No. 208/83-C.E., dated 1-8-1983 is admissible in respect of M.S. round bars cleared by the respondents during the period from 1-1-1984 and which were manufactured out of re-rollable scrap supplied by M/s. Vizag Shipping Metal Processors, Vizag and M/s. Ushodaya Shipping Pvt. Ltd., Vizag. The Assistant Collector of Central Excise has observed that re-rollable scrap used in the manufacture of M.S. round bars has arisen out of breaking up of old ships. He has held that the ship breaking unit did not pay Central Excise duty on the re-rollable scrap under Central Excise Tariff Item 25 and hence the entire quantity of such scrap supplied by these two ship breaking units is clearly identifiable as non-duty paid stock for the purpose of Notification No. 208/83-C.E., dated 1-8-1983. Accordingly, he has demanded Central Excise duty on the M.S. round bars in question. The Collector (Appeals) has held that in so far as the inputs have paid duty under the Customs Tariff Act, they are clearly recognisable as duty paid stock. He has, therefore, set aside the order o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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