9911796707
TMI Blog1995 (1) TMI 198X X X X Extracts X X X X X X X X Extracts X X X X ..... nd tools is not exempt under Notification No. 171/88, dated 13-5-1988 as the same arises out of the exempted goods and the condition under Col. 5 against Sr. No. 3 of Notn. is not satisfied, is not correct which merits to be rejected. The respondents have further stated that the exemption to waste and scrap emerging during the course of manufacture of hand tools is available under Notification No. 171/88, dated 13-5-1988 as amended because the waste and scrap has arisen out of duty paid material. Respondents relied on the judgments quoted as 1978 (2) E.L.T. (J 399), 1988 (35) E.L.T. 142, 1987 (32) E.L.T. 521 to interpret the term paid Nil rate of duty. They have contended that whatever duty was payable on the raw material was paid. Since ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on No. 214/86-C.E. Such permission was granted by the Asstt. Collector. However, the department issued a show cause notice alleging that the appellants were not entitled to the benefit of Notification No. 171/88-C.E. for the waste and scrap cleared inasmuch as it could have arisen out of the goods received from the job workers availing the benefit of Notification No. 214/86-C.E. It was alleged that in view of the conditions in the Notification No. 171/88 that it ought to have arisen from goods on which duty of excise leviable or the additional duty leviable on such goods, may be, has already been paid. It was alleged in the show cause notice that since the flats and bars received from the job workers were exempt under Notification No. 214/8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1987 (32) E.L.T. 521. The ld. Counsel also referred to letter No. 345/15/87-TRU, dated 28-7-1987 of Ministry of Finance clarifying that duty already paid would also apply when duty paid is nil while interpreting Notification No. 269/86-C.E. and that material was initially duty paid and that it is incorrect to look for payment of duty on each and every stage. 4. Sh. Somesh Arora, ld. JDR appearing for the respondent submitted that the pertinent point to be noted here is that waste/scrap arises out of exempted goods and the condition under Column No. 5 against S. No. 3 of Notification is not satisfied; that in the instant case, the scrap/waste was sent to the job workers for conversion into flats/bars of steel and were received back by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . A lot of emphasis was laid by the appellants upon the judgment of the Hon ble Patna High Court in the case of Tata Yodogawa Ltd. The relevant paras [16 to 21 33] of the judgment are reproduced below :- * * * * * * * 6. We also find that in the case of I.E.L. Ltd. the Tribunal had held [in para 8] :- * * * * * * * 7. In the case of the Elphinstone Spinning and Weaving Mills the Hon ble Supreme Court had held :- 14. We are not inclined to accept the contention of Dr. Syed Mohd that the expression levy in Rule 10 means actual collection of some amount. The charging provision Section 3(1) specifically says There shall be levied and collected in such a manner as may be prescribed the duty of excise...." It is to be noticed that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... flats in view of the exemption by Notification No. 214/86. The contention of the department was that excise duty is leviable on waste and scrap arising in the manufacture of hand-tools manufactured out of Bars and Flats as the Bars and Flats had been received by the appellants without payment of duty. 9. In view of the said stand taken by the parties before us, contentions are limited to the interpretation that they put to the words used in Notification No. 171/88, dated 13-5-1988 namely, on which duty of excise leviable under the said Schedule or the Addl. Duty leviable under Section 3 of the Customs Tariff Act, 1975 (51 of 1975) as the case may be, has already been paid, but the credit of such duty has not been taken under Rule 56A or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... find that in the Notification dealt with in the case of Tata Yodogawa by the Hon ble Patna High Court, similar condition of payment of duty for availing exemption was there. Admittedly, the position in the instant case is that when Bars and Flats were purchased from the market for manufacture of hand-tools, duty was paid on Bars and Flats and no credit under Rule 56A or 57A of the duty paid on Bars and Flats was taken by the appellants and therefore, the position of the two Notifications. in the instant case is similar to the two Notifications. dealt with by the Hon ble Patna High Court in the case of M/s. Tata Yodogawa. Having regard to the fact that the Hon ble Patna High Court as well as the Hon ble Supreme Court has already held that ni ..... X X X X Extracts X X X X X X X X Extracts X X X X
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