TMI Blog1992 (10) TMI 198X X X X Extracts X X X X X X X X Extracts X X X X ..... 53,983.24) has been demanded on 493.97 M.Ts. of sheets and circles of copper/brass manufactured and cleared between 1-8-1985 and 30-6-1990. Penalty of Rs. 2,25,000 has been imposed on the firm. E/903/91 arises out of the same order, against the penalty of Rs. 25,000/- imposed upon the partner of Ajit Metals. In E/902/91, the duty on 213.746 M.Ts. of gullies/patlies works out to Rs. 7,05361.80 (BED Rs. 6,49,858.20 + SED Rs. 55,503.60) and duty on 875.004 M.Ts. of sheets and circles of copper/brass works out to Rs. 29,92,560.35 (BED Rs. 28,92,581.37 + SED Rs. 99,978.98) - the period of clearance is the same as in E/896/91. Penalty is to the tune of Rs. 5 lakhs. A penalty of Rs. 50,000/-imposed upon the partner of Ashwin Metal Works by the same impugned order has been challenged in E/904/91. 2. The facts of the case are as below : The appellants are engaged in the manufacture of (i) sheets and circles of copper/brass; (ii) gullies/patlies of copper/brass; (iii) waste and scrap of copper/brass, all products falling under Tariff Item 26A of the CE Tariff as it existed prior to 28-2-1986 and thereafter under Chapter 74 of the Central Excise Tariff Act, 1985. Classification lists were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sheets and circles of copper/brass without extending the benefit of Notifications claimed by the appellants and proposing levy of penalty. The appellants contested both on merits and limitation, submitting in their reply dated 8-11-1990 as follows :- (a) As stated in the show cause notice, the final product made by the units are sheets and circles of copper/brass. For manufacturing such sheets and circles, the basic raw materials used by the units are zinc and copper ingots and waste and scrap of copper/brass. Whereas zinc and copper are purchased from the open market, waste and scrap of copper/brass is not only purchased from the open market but is also generated within their own factory in the manufacturing activities and are captively consumed for the purpose of manufacturing final products i.e. sheets and circles of copper/brass. From the waste and scrap of copper/brass and zinc and copper ingots Gullies and Patlies of copper/brass are made by casting operations. The units have been carrying on their aforesaid activities since number of years. They have regularly filed classification fists covering their entire activities and specifically entering sheets and circles of copper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y and such exempted inputs are used for the purpose of making articles of copper, it can never be held that duty leviable on inputs has not been paid, in so far as in such cases, duty leviable would be nil . The aforesaid interpretation is further supported by Explanation (2) of Notification No. 178/88. The said Explanation states:- All stocks of the inputs in the country, except such stocks as are clearly recognizable as being non-duty-paid , shall be deemed to be inputs on which duty has already been paid . Hence, in the light of the clear Explanation provided by the Notification itself, the word leviable must be interpreted in light thereof. Now, the words non-duty paid have also been interpreted by the Honourable Tribunal in its various decisions, and has held that the said words imply cases where the goods are clandestinely removed without suffering duty payable under the Central Excises and Salt Act, 1944 read with notification. Hence only those goods, which are clearly recognizable as having been clandestinely removed without payment of duty (for example, goods cleared without cover of gate pass when they are otherwise, subjectable to some duty) that would be non- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e benefit of exemption notifications, the adjudicating authority relied on the order of the Tribunal in the case of M/s. Rapsri Engg. Industries Pvt. Ltd. v. CCE 11989 (43) E.L.T. 577)1 to hold that nil duty paid goods cannot be considered as duty paid. Hence, this appeal. 7. We have heard Shri Devan Parikh, Ld. Counsel and Shri S.K. Sharma, Ld. DR. 8. Various statutory records and registers clearly disclose the fact that waste copper was captively generated and that the said waste on which exemption was claimed was used captively to make gullies/patlies which were again captively used to make sheets/circles of copper. Therefore, the failure to maintain RG-1 registers for gullies/patlies and non-submission of R.T. 12 Returns for waste loses significance, especially in view of the fact that the appellants have maintained R.G. 1 Register and also issued Gate Passes covering the waste and have entered gullies/patlies in R.T. 5 Returns. Our attention was drawn by the ld. Counsel to the Form IV - raw-material Register containing details such as opening stock, receipt, issuance and closing stock of raw materials - from the issue column it is clear that not only the market waste and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he aforesaid condition is not satisfied as waste and scrap of copper have not suffered any duty as they are exempt from duty under different notification and further more that gullies/patlies have also not suffered duty as exemption is claimed thereon under the aforesaid notification itself. In other words, it is the case of the Department that gullies/patlies are not entitled to exemption as they are made from waste and scrap of copper which has not suffered duty, being exempt from payment of duty under Notification No. 172/84. It is also the case of the Department that sheets/circles of copper are not entitled to exemption as they are made from gullies/patlies on which also, the appellants had claimed exemption under the very same Notification i.e. 178/88 and therefore, such sheets are made from inputs on which excise duty leviable has not already been paid. The word leviable has been interpreted by various High Courts and by the Tribunal to mean duty prescribed under the Act read with any exemption notification in force. The Patna High Court, in the case of Tata Yodogawa Ltd. v. Union of India - 1987 (32) E.L.T. 521, has held that the words already paid mean contracted to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... excisable goods shall be levied and collected at the rates set forth in the First Schedule. Hence, levy and collection on excisable goods is to be done, as per the rates set forth in the First Schedule. Where duty on any goods is leviable at nil rate as per the schedule, such goods may be construed to be the goods charged to nil rate of duty. Where goods are charged to rates specified as set out in the Schedule and they are exempted by way of an exemption notification under Rule 8(1) of the Central Excise Rules, they could be construed as goods subject to the rates specified in the First Schedule but are exempted and they cannot be construed as goods charged to nil rate of duty . Hence in our view, the words charged to Nil rate of duty referred to in the order of the Government of India dated 7-4-1986, have a special connotation and meaning and used in the context of the rate of duty as specified in the First Schedule. This view of ours is also strengthened by the fact that the Government of India in its later order dated 20-5-1988 specifically referred to goods wholly exempted from duty as not eligible for deemed Modvat credit. The relevant portion of the order of the Gove ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
