9911796707
TMI Blog1997 (7) TMI 292X X X X Extracts X X X X X X X X Extracts X X X X ..... of fine of Rs. 1 lakh. 2. Appellant is engaged in the manufacture of steel angles falling under erstwhile T.I. 25(11) and under Chapter Heading 72.10 of the new Tariff using materials obtained from breaking ships without obtaining Central Excise licence and clearing the goods without payment of Central Excise duty. On receipt of information about this state of affairs, Officers of Central Excise visited the factory premises on 23-9-1986, examined documents, recorded statement of one of the partners of the appellant and found that the inputs consisted of MS plates classifiable under Chapter Heading 72.15 and the final product, namely, MS angles manufactured by appellant from such plates obtained from breaking ships was not entitled to bene ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er forms of iron and steel covered by Chapter sub-headings 7206.20, 7206.90, 7207.20, 7208.00, 7209.90, 7210.10 etc. The reply also pleaded benefit of Notification 208/83. It was contended that since duty was wholly exempt under the notification, appellant was not required to obtain Central Excise licence, follow the formalities or pay duty. 4. The Collector of Central Excise overruled these contentions and confirmed the demand of duty for the period December, 1985 to September, 1986 and imposed penalty and ordered confiscation of the assets. 5. The period covered by the show cause notice is December, 1985 to September, 1986. A part of the period was when the erstwhile Tariff was in force and rest of the period is after the new Tariff w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontend that the same is the position in the present case and the appellant has failed to discharge the burden of proving that the inputs obtained from ship breaking were really duty paid. We do not think that the department can raise this contention at this stage. That is because the show cause notice proceeds on the basis that all the inputs in question that Central Excise duty had been paid on all the inputs in question. The notice states as follows : The officers, however, noticed that the `Ambica Steel have obtained the scrap and waste of ship breaking on payment of Central Excise duty. Coupled with the above is circumstance that the show cause notice did not allege that the inputs were clearly recognisable as non-duty paid or th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T. 76 (Tribunal)] where it was held that the fact that the old and used goods of the specific descriptions are purchased from the market or arise as a result of ship breaking, is immaterial so far as the description of the inputs is concerned. 8. The show cause notice refers to inputs as MS plates . MS plates as such is not covered by the erstwhile Tariff Item or the new Heading enumerated in Column 2 corresponding to Sl. No. 2 of the Table to the Notification. The reply to the show cause notice did not specifically deny that the inputs were MS plates but contained a positive assertion about the nature of the inputs, namely, bars, rods, MS angles, blocks, lumps and other similar forms. These specific descriptions are covered by sub-ite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lsewhere specified etc. 72.12 takes in plates etc. All these descriptions are covered by 72.15. It is thus clear that goods which satisfy the description of Chapter Heading 72.06 would also attract Chapter Heading 72.15 if they are derived from ship breaking. One has to look to Chapter Heading 72.15 to find out the rate of duty payable but nevertheless one cannot ignore the fact that the description of the goods fit in Chapter Heading 72.06 also. In that view, if inputs satisfying the description mentioned in Chapter Heading 72.06 are used as inputs and those inputs are derived from ship breaking, the benefit of the Notification must have been held to be available since Chapter Heading 72.06 is one of the Chapter Headings enumerated in Colu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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