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TMI Blog2004 (7) TMI 529X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 Show Cause Notices on the duty demands made on different assessees issued to recover excise duty on ferrous and non-ferrous scrap resulting from breaking of ships in Mumbai. 3. The Commissioner, after considering the replies of the Respondents found : (i) The ship breaking activity includes the activities of dismantling, breaking and cutting the ship which results in production of the ferrous and non-ferrous scrap of iron and steel copper/brass, lead, tin and aluminium etc. Thus the ship breaking activity amounts to manufacture under Section 2(f) of Central Excises Salt Act, 1944. The resultant scrap arising during this process will have to discharge appropriate rate of duty under appropriate T.I. of Central Excise Tariff 1944 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se, Rajkot were not available to the appellants herein as they were not parties to the writ petition filed before the Hon ble Gujarat High Court. Therefore, the drawing of demands prior to the period from the issue of Notification 386/86, dated 20-8-1986 could not be effected in this case. (iv) All the units were under SRP and classification lists filed were vague and in spite of directions to file proper classification lists, and payment of duty, there was a deliberate disregard to the liability and therefore the proviso to Section 11A(1) of the Act correctly invoked. (v) As regards M/s. Sohanlal Co. the Commissioner has held : The instant Show Cause Notice No. V-Adj (74)15-16/89, dtd. 30-1-90 for Rs. 20,753.58 is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e been paid on 25-5-85 and the concerned Asstt. Commissioner had given no objection to allow the vessel at the bleaching yard on 27-5-85. It is clear the party could have undertaking the ship breaking job on the ship earliest some time by June 1985 or so, whereas the instant Show Cause Notice demanding an amount of Rs. 17,79,641.45 has been demanded for the clearance of scrap during the period 17-3-85 to 2-12-85. The party has miserably failed to show any proof of payment of duty in regard to the clearance of scrap during the period 17-3-85 to 2-12-85, hence the charges set out in the Show Cause Notice against M/s. Saibaba Ship Breaking Co. has been established. He therefore ordered confirmation of the demands as impugned and imposed pen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n respect of 75% excise liability and allow the undertaking to be revoked. 2. Upon withdrawal of the court case, Government would consider an appropriate amount of reduction in excise duty on ship scrap and petitioner shall abide by such decision. 3. Government would also evolve a suitable mechanism to ensure waiver of the arrears of excise duty on ship scrap for the past period. 4. There will be no order as to costs. The writ petitions were disposed by the High Court in accordance with the said consent terms on May 1, 1986, by the following order : The parties have filed consent terms signed by the learned counsel appearing for the respective parties in these special civil appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omplying with these clear instructions cannot be upheld, when it is found that in this case all the demands are up to the period of March 1986 and could not have been confirmed vide the impugned Order in view of the directions of the ministry and waived the duties prior to 20-8-1986 on the excisable goods resulting from the activity of breaking of ships. (e) When demands of duties cannot be confirmed and even confirmed demands have to be waived as per the directions issued by the Government of India, Ministry of Finance, Department of Revenue, Central Board of Excise Customs, there can be no question of levy of duty on the appellants as arrived at by the Commissioner. The orders of penalties are therefore required to be set aside. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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