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2017 (4) TMI 893 - AT - Central ExciseCompounding scheme - Aluminum Circles - N/N. 34/2001 CE dated 28/06/2001, as amended - whether the compounding facility have been rightly rejected? - whether the appellant is liable to pay Central Excise duty on removal of the scrap during the period of dispute June, 2003 to March, 2006? Held that: - there is no cotumacious conduct on the part of the appellant in not paying the duty on Aluminum Circles, their intermediate product. The appellants were holding the bona-fide belief that as the final product is not taxable, accordingly, they need not pay the tax nor required to register with the Department - the appellant have paid the duty by opting for the compounding scheme, soon after, the inspection and much before the issue of SCN under proper intimation to the Revenue. There is no ostensible reason for rejecting the compounding facility for payment of duty on Aluminum Circles, given by the courts below. The reason given for rejection of exemption on removal of scrap when the final product is not liable to duty, is far-fetched and amounts to stretching the law which is not permissible - the appellant is entitled to the compounding facility under N/N. 34/2001-CE, and they have rightly paid the duty - the appellants are also not required to pay duty on the Aluminum Scrap removed, in terms of N/N. 89/95-CE. Appeal allowed - decided in favor of appellant.
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