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1993 (12) TMI 147

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..... Turnings arising in the course of manufacture of Seamless Tubes and Pipes as such scrap had been classified under Tariff Item 26 of the Central Excise Tariff and Credit taken on steel bars and blooms falling under Tariff Item 26AA(i) could not be utilised for payment of duty for goods falling under Tariff Item 26. Their appeal against the Assistant Collector s said Order was allowed by the Collector (Appeals). He had held that the scrap had arisen as an incidental product in the course of manufacture of Seamless Tubes and that it will be unfair to deny them the Credit facility under Rule 56A in respect of the proportionate quantity of the waste products. He has remarked that even in their subsequent classification list effective from 19-7-1982, the same Central Excise Officers had accepted the classification of Bell Ends, Front Ends, Turnings and Borings as falling under Tariff Item 26AA and hence the earlier classification under Item 26 appeared to be a mistake. He had proceeded to observe that even if the waste products were correctly classifiable under Item 26 as melting scrap, they could not be denied the benefit of Rule 56A in respect of such scrap. He, therefore, allowed the .....

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..... from 1-3-1982 was approved by the Assistant Collector on 30-9-1982 classifying the subject goods under Tariff Item 26. The other classification list referred to by the respondents was for items classified under Item 68 where the wastes in question were referred to as other goods manufactured by them. The classification of such goods had not been approved by the Department under Item 26AA as claimed by the respondents and the relevant entry in that classification list had been struck off by the officers. As there was no approval granted by the Departmental Officers for classification of the waste under Item 26AA, the finding of the Collector (Appeals) based on misstated facts was incorrect and wrong. It has, therefore, been pleaded that the order-in-appeal passed by the Collector (Appeals) be quashed and the order of the Assistant Collector, Jamshedpur restored. 3. The appeal which was originally filed before this Regional Bench was transferred to the Special Bench of the Tribunal vide Order No. 75/CAL/1987-107 dated 9-4-1987 as the learned Departmental Representative submitted that the issue for decision was interpretation of Rule 56A. However, subsequently when the matter came .....

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..... der the proviso to Clause (i) under Rule 56A(5) there should be wilful misstatement or suppression of fact on the part of the manufacturer. There was no such factor involved in the present case and hence the Department could apply only the normal time-limit of six months. This limit was over when the notice was issued and hence it was time-barred. This being a legal question they can raise the same though they had not raised it before the lower authorities. On merits also, they have a strong case as the Collector (Appeals) had allowed their appeal on a correct appreciation of the legal position involved. Moreover, this Bench had disposed of exactly the same issue on their own appeal vide Order No. A-205/Cal/1991 dated 25-2-1991 as mentioned by the Special Bench in their Order transferring the file to this Bench. By the said order this Bench had allowed their appeal, holding that they were entitled to proforma Credit of duty paid on steel blooms and billets for payment of duty on the scrap arising in the course of manufacture of Seamless Pipes and Tubes. A similar decision may be taken in the present case which is exactly similar and the Department s appeal rejected. 6. We have co .....

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..... he same waste product in their subsequent classification. While the respondents have contended that in that subsequent classification list, their classification of the waste products under Item 26AA was approved by the authorities, this is controverted in the appeal by the appellant Collector. It has been contended that in the said classification list, their declared classification under Item 26AA was amended to 26. Collector (Appeals) did not consider such a fact when he accepted the contention of the present respondents that the approved classification in the subsequent classification list was only under Item 26AA. On that basis, he had also observed that the classification of the waste products under Item 26 appeared to be a mistake. He, however, held that even if the waste products are classified under Item 26 as melting scrap, they could not be denied the benefit of Rule 56A for such scrap. 8. We feel that once it is accepted that the conclusion of the Assistant Collector about their non-eligibility for proforma Credit on account of the different Tariff Classification of the materials and the products, is legally correct, the actual finding of the Collector (Appeals) that it .....

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..... r relating to the appeal filed by the present respondents vide the decision reported in 1991 (56) E.L.T. 596 referred to supra. The relevant paragraphs from the said decision are extracted below :- ****** 9. In the above-mentioned case, the question of inadmissibility of Credit on the ground that the waste products, viz. Bell Ends, Front Ends, Turnings and Borings did not fall under the same Tariff Item as the material from which they were obtained, namely billets, was not raised before us nor did the decisions of the authorities below proceed on that basis. In the present case, as the said criterion has been agitated, we have to take note of the same. So considered, the respondents cannot be said to be eligible for the benefit of proforma Credit in respect of the waste products in question. 10. Now comes the question of time-bar as far as the notice is concerned, which plea was raised by the learned Counsel, Shri N. Mookherjee. The availment of Credit which is sought to be denied relates to the period from 1-3-1982 to 28-2-1983. The classification of the said products under Item 26 was decided on 30-9-1992. It is this decision which had become crucial in the context of Claus .....

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