9911796707
TMI Blog1997 (3) TMI 326X X X X Extracts X X X X X X X X Extracts X X X X ..... lements, old house-hold utensils like bucket, pitcher and other like items. Such items are not charged to duty. He also mentioned in his order that the goods procured by them were in rusty and dusty condition. 2. Before the Collector of Central Excise (Appeals) among other grounds the appellants submitted for that waste and scrap of steel purchased from the open market comprises of various old and used items of steel. The composition of the said old and used items of steel which is a scrap can never be clearly recognisable as being non-duty paid. The interpretation as sought to be given by the Assistant Collector of the Central Excise defeats the very object and purpose of the order and/or directions of the Government dated 7-4-1986. The Collector of Central Excise (Appeals) had observed that the reference to the nature of the scrap was not relevant in the absence of any definition of waste and scrap in Notification No. 177/86-C.E., dated 1-3-1986 or in the direction dated 7-4-1986. In appeal before us the Revenue had stated that the deemed credit facility was not available on the old and used scrap of iron and steel purchased from the market in rusty and dusty condition. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agricultural implements, old house-hold utensils like bucket, pitcher and other like other old items. In the order dated 7-4-1986 issued from the file No. B 22/5/86-TRU it had been directed under the second provision to Rule 57G(2) of the Central Excise Rules, 1944 that among others the iron and steel and articles thereof which were classifiable under heading numbers as given under Column (3) of the table annexed to that order, purchased from outside and lying in stock on or after 1-3-1986 with the manufacturers manufacturing the final products may be deemed to have paid the specific duty. It was also directed that no such credit shall be allowed if such inputs were clearly recognisable as being non-duty paid or charged to nil rate of duty. The directions had been issued under the second proviso to Rule 57G(2) relating to the Modvat credit. 7. Under Ministry's order F.No. B22/30/86-TRU, dated 29-9-1986 it had been clarified that the waste and scrap of iron and steel like bazar scrap which was clearly recognisable as being non-duty paid or charged to nil rate of duty were not entitled to the deemed credit even during the period prior to 29-9-1986. The ld. Advocate had submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral Government may direct, without production of documents evidencing payment of duty. This order dated 7-4-1986 inter alia provided for deemed credit in respect of the inputs unless it was clearly recognisable as being non-duty paid. This order was modified in August, 1986 vide order dated 29-8-1986 [refer Vadodara Collectorate Trade Notice No. 214/86, dated 5-9-1986 at page T18 of 1986 (26) E.L.T.] and the facility of deemed credit given in respect of wastes and scrap of steel falling under Heading No. 72.03 was withdrawn. The period involved in these proceedings is from 13-11-1986 i.e. subsequent to the order dated 29-8-1986 under which the facility of deemed credit in respect of wastes and scrap classifiable under Heading No. 72.03 of the Central Excise Tariff was withdrawn. Under Ministry's Order F.No. B-22/30/86-TRU, dated 29-9-1986, it was clarified that the wastes and scrap of iron and steel like bazar scrap which was clearly recognisable as being non-duty paid or charged to nil rate of duty, were not entitled to the deemed credit even during the period prior to 29-8-1986. It was further clarified that the amending order of 29-8-1986 was issued to deal with the problem of m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f sought to be avoided by the deemed proviso had been discussed. It was observed that mischief could not have been overcome by stipulating that credit is available even if duty has not been paid on inputs, for that would be against the pivotal element of the scheme. If duty need not be paid and has not been paid, the question of duty paid being earned as credit did not arise. The only way of overcoming the mischief was to dispense with the requirement of documents evidencing the payment of duty. The Tribunal in Para 25 has held that the scrap input was clearly and wholly exempt from duty and the assessee were not entitled to deemed credit. In the case of Jhunjhunwala Steel Works v. Collector of Central Excise, Nagpur - 1997 (89) E.L.T. 787 Tribunal, it had been mentioned that waste and scrap were dutiable only when they were manufactured as a product in a factory and that all waste and scrap available in the market could not be considered as manufactured goods and all the scrap available with the Kabaris could not be considered as manufactured product and could not be taken to have paid any Central Excise duty. Reference was made to the Larger Bench decision in the case of M/s. Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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