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TMI Blog1992 (2) TMI 199X X X X Extracts X X X X X X X X Extracts X X X X ..... gaged in the manufacture of Aluminium Extruded Sections and Shapes from duty paid aluminium ingots and billets. In the course of manufacture of aluminium extruded shapes and sections, the appellants obtained waste and scrap of aluminium which was remelted within the factory of production along with ingots and billets and was used in manufacture of such aluminium extruded shapes and sections. On 12-10-1983, show cause notice was issued under Section 11A of the Act requiring the appellants to pay the duty amounting to Rs. 32,34,394.24 on the clearance of aluminium waste and scrap generated and consumed in factory during August 1982 to May 1983 for the reasons narrated in the annexure since same was cleared without payment of duty. After consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the period August 1982 to May 1983 under show cause notice dated 12-10-1983 was substantially barred by time as proviso to Section 11A was neither mentioned in the show cause notice nor proviso could be invoked for extending larger period as entire information was within the knowledge of the Department. 4. He said that demand raised under show cause notice dated 12-10-1983 was in respect of waste and scrap. The waste and scrap generated during the period of manufacture and use within the factory of production is exempt from the payment of duty in terms of Notification 34/81, dated 1-3-1981. This Notification, inter alia covers C. Ex. 27 as a whole and does not specify any such item. Aluminium extruded shapes and sections fall under Old Tar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (56) E.L.T. 485 (Tri.) = 1992 (19) ETR 54. He contended that even assuming that show cause notice refers to demand of duty on shapes and sections, same cannot be demanded as duty was correctly paid in terms of Notification No. 271/82. He said that it is on record that the original starting materials for manufacture of the said finished goods viz. Aluminium Shapes & Sections are ingots, billets on which the appropriate amount of duty at the rate prescribed under the Notification No. 193/81 or 271/82 was already paid. It is also evident that the generation of waste and scrap of aluminium was inevitable feature of the manufacturing process and scrap so generated from the duty paid aluminium ingots/billets was sent back into recycling process ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Iron Steel Co. Ltd. - 1977 (1) E.L.T. (J 61). (3) Kirloskar Brothers Ltd. v. Union of India & Others -1983 (34) E.L.T. 30. (4) MRF Ltd., Madras v. Collector of Central Excise, Madras. -1990 (50) E.L.T. 546 (Tri.) = 1990 (16) ETR 76. 7. Lastly he argued that Collector of Central Excise and Customs, Baroda passed an order authorising the Assistant Collector to file an application dated 13-12-1985 under Section 35E of the Act against the order-in-original dated 21-12-1983 is barred by limitation and without jurisdiction since authorisation was issued after one year. He said that though this issue was already decided by the Tribunal against party in the case of M/s. Sarabhai Chemicals of Baroda vide order Nos. 378 & 379/86-C, dated 4-7-1986 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctor appeared to be totally confused about the dispute. They both, as pointed out by the counsel for M/s. Banco Aluminium Ltd., speak as if the dispute was the concessional rate of duty on the finished product, the shapes and sections made from waste and scrap which had not paid duty. But the show cause notice No. MP 20-LAR 6102/V/83 (undated) has this in the annexure :- "On scrutiny of accounts maintained by M/s. Banco Aluminium Ltd. B1, Baroda, it is observed that they cleared waste and scrap of aluminium from 8/82 to May. 1983 as mentioned below for internal consumption in their factory without payment of appropriate C. Ex. duty. The duty on this scrap/waste thus cleared is chargeable to C. Ex. duty @ BD 40% Adv. and 10% Spl. C. Ex. dut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Co. Ltd. [1977 (1) E.L.T. (J 61)] that where duty paid pig iron is mixed with non-duty paid pig iron, the set off cannot be refused on the ground that non-duty paid material has also been used, and further reaffirmed the view in the case of Aluminium Corpn. of India Ltd. v. Union of India [1978 (2) E.L.T. (J 452)] observing that if the Notification does not exclude from exemption altogether manufacture made partly out of duty paid and partly out of non-duty paid crude, the exemption cannot be denied on the reasoning that the sheets, circles, etc. had not been manufactured wholly, and solely out of duty paid slabs (para 11). Following the ratio of the aforesaid decisions, we hold that benefit of exemption cannot be denied in terms of Notif ..... X X X X Extracts X X X X X X X X Extracts X X X X
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