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TMI Blog2014 (5) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... he inference that the goods auctioned were duty paid. The benefit of Notification was wrongly denied to the petitioners - Following decision of Laxmi Rolling Mills & Others versus CEGAT , New Delhi [2001 (12) TMI 85 - HIGH COURT OF JUDICATURE AT ALLAHABAD] - Decided in favour of assessee. - Central Excise Reference No.-3 of 2004 - - - Dated:- 4-4-2014 - Hon'ble Ashok Bhushan And Hon'ble Suneet Kumar,JJ. For the Applicant : A. P. Mathur For the Respondent : S. P. Kesarwanni, Ramesh Chandra Shukla ORDER Heard Shri A.P.Mathur, learned counsel for the appellant and Shri R.C.Shukla appearing for the respondent. In this Central Excise Reference, following are the questions which have been referred for consideration: (i) Whether the benefit of Notification No.202/88-CE dated 20.5.1988 can be denied when Railways have paid duty on the auctioned old rails while purchasing the same and the same has been sold to the applicant as such? (ii) Whether the duty paid goods after being discarded becomes non-duty paid by lapse of time and extensive use? (iii) Whether the old rails purchased from the Railways can be clearly recognised as non-duty paid whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s are all duty paid and there is no occasion for demanding duty from the applicant when same is purchased in auction and used as raw material for manufacture of final product. He submits that the Adjudicating Authorities without there being any basis have treated that Rails were not duty paid whereas there was no basis for drawing any such presumption and burden was on the department to establish that the goods were recognizable as non duty paid. Goods were clearly recognizable and non duty paid. He submit that Adjudicating Authority committed an error while saying that this is well known that these are not duty paid . He submits that the Appellate Authority as well as the Tribunal without adverting to the notification dated 20.5.1988 has dismissed the appeal. Shri Mathur has placed reliance on the judgement of this Court reported in 2002(48) RLT 1 (Alld.) Laxmi Rolling Mills Others versus CEGAT , New Delhi and others as well as the judgment of the Apex Court reported in 2002(53) RLT 888 (SC) Vivek Re-Rolling Mills versus Collector of Central Excise. He has further submitted that after the aforesaid judgment of the High Court even the Tribunal has been passing orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inputs on which duty has already been paid. TABLE Sl. No. Description of inputs Description of final products 1 Pig Iron and spiegeleisen in ingots; blocks or other primary forms; ferrous waste and scrap; remelting scrap ingots of iron; granules and powders, of pig iron and spiegeleisen ; puddled bars and piling of iron; cast articles of iron falling under sub-heading No.7325.10. Pig iron and spiegeleisen in ingots, blocks or other primary forms; waste and scrap of iron; remelting scrap ingots of iron; granules and powers, of pig iron and spiegeleisen; puddled bars and piling of iron; iron sleepers; ingot moulds of iron falling under heading No.84,54; tubes and pipes and blanks therefore of iron; and cast iron pipe fittings. 2 Ingots or other primary forms of (i) non-alloy steel, (ii) stainless steel and (iii) other alloy steel; semi-finished products of (i) non-alloy steel,(ii) stainless steel and (iii)other alloy steel, pieces roughly shaped by rolling of iron or steel. Granules and powders of steel, ingots or other primar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t petitions are that the petitioners are engaged in manufacture of bars and rods of mild steel from rollable and re-rollable old and discarded rails wheels, fishplates etc. purchased from railway auctions without melting the same. The petitioners are duly registered with the Central Excise Department. The petitioners were availing the benefit of Notification No.202/1988-CE., dated 20-5-88 as amended by Notification No. 33 of 1992-C.E., dated 1-3-1992 in respect of clearance of their final products. The claim of the petitioners is that in terms of the said notification MS. round bars were eligible for clearance at nil rate of duty if the same were manufactured out of rollable/re-rollable materials which are clearly recognizable as duty paid. The petitioners were served with a notice of demand-cum-show cause as contained in Annexure-2 to each writ petitions on the ground that the petitioners have cleared their end-products at nil rate during the period of August, 1992 to February, 1994 by availing the benefit of notification as aforesaid though the said notification was not applicable in their case. The petitioners were required to show cause to the Commissioner Central Excise, respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cisable goods or by the person who stores such goods in a warehouse. It is not the case of the Department nor there is any finding to this effect by the authorities below that the railway, who auctioned the discarded rails etc. to the petitioners, was manufacturer, producer and curer of the goods auctioned by it. Even if for the argument sake it is assumed that the goods were manufactured by railway the same could not have been cleared for consumption by themselves without payment of excise duty as is evident from reading of Rule 9. In the circumstances and in view of the aforesaid provisions of law there was no occasion for the authorities below to presume that the goods were non-duty paid. They shall have to be deemed duty paid at the time when the same were used by the railway or when the same were auctioned. No duty is leviable at the time of sale of excisable goods after the same have been used by the party concerned. Entry No. 73.02 of Chapter 73 of the Central Excise Tariff Act, 1985 reads as follows : 'Railway or tramway track construction material of iron or steel, the following: Rails, check-rails and rack rails, switch blades, crossing frees, point rods and other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used railway material was used as inputs in the said case. The Apex Court laid following in paragraph 2 of the judgement. The appellants claimed benefit of exemption under Notification No. 202/88-CE., dated May 20, 1988. The said notification exempts goods of the description specified in column (3) of the Table annexed thereto and falling within Chapter 72, Chapter 73 or Heading No. 84.54 of Schedule to the Central Excise Tariff Act, 1985 from the whole of the duty of excise leviable thereon which is specified in the said Schedule, when the final products are made from any goods of description specified in the corresponding entry in column (2) of the said Table. Such goods are referred to as 'inputs'. There is yet another condition that the inputs should have suffered the duty under the said Act. There is no dispute that the inputs have suffered the duty. The only controversy which resulted in denial of benefit of the notification to the appellants from the original authority up to the stage of the Tribunal is that the inputs used by the appellant for manufacture of finished product, do not answer the description of the goods specified in column (2). The appellants are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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