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TMI Blog2015 (7) TMI 344X X X X Extracts X X X X X X X X Extracts X X X X ..... (i) of the Table annexed to Notification No.62/95-CE dated 16.3.1995 (as amended), the problem arose because the first respondent cleared the exempted goods on payment of duty during the period in dispute. The erroneous payment of duty caused the Department to hold that the goods are other than exempted goods and therefore demand was made. On adjudication, the demand was sustained. The Tribunal came to hold that the show cause notice as well as the adjudication order proceeds on the misconception of the term 'exemption'. In otherwords , the Tribunal relying upon the Explanation to Notification No.89 of 1995-CE dated 18.05.1995 came to the conclusion that since the manufactured goods are exempted goods, the benefit of Notification No.89 of 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent? 2. The brief facts of the case are as follows: The first respondent Integral Coach Factory (ICF) belonging to the Central Government is engaged in the business of manufacturing passenger coaches both self-propelled and non-propelled, steel freight containers and parts of passenger coaches for railways under Chapter 86 of CET 1985. They are availing exemption under Notification No.62/95 CE dated 16.3.1995. Alleging that ICF had cleared ferrous and non-ferrous scrap without payment of Central Excise duty, show cause notice was issued proposing to demand duty along with interest and penalty. The first respondent/assessee replied to the said show cause notice stating that they are eligible for exemption under Notification No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s within the meaning of this expression given under the Explanation to the Notification. We have found force in this argument. As per the Explanation, exempted goods means excisable goods which are chargeable to 'nil' rate of duty or exempted from the whole of the duty of excise leviable thereon by any other Notification issued under sub-rule (1) of Rule 8 of the Central Excise Rules, 1944 or sub-section (1) of Section 5A of the Central Excise Act, 1944. It is not in dispute that coaches, coach components and containers, all falling under Chapter 86 of the Central Excise Tariff Schedule were exempt from payment of duty under S.No.16( i ) of the Table annexed to Notification No.62/95-CE ibid during the material period. Erroneous p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 6. The assessee availed the benefit of this Notification in respect of clearance of waste scraps arising out of manufacture of exempted goods. Though exemption in respect of manufactured goods is available in S.No.16(i) of the Table annexed to Notification No.62/95-CE dated 16.3.1995 (as amended), the problem arose because the first respondent cleared the exempted goods on payment of duty during the period in dispute. The erroneous payment of duty caused the Department to hold that the goods are other than exempted goods and therefore demand was made. On adjudication, the demand was sustained. The Tribunal came to hold that the show cause notice as well as the adjudication order proceeds on the misconception of the term 'exemption ..... X X X X Extracts X X X X X X X X Extracts X X X X
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