2009 (12) TMI 471 - AT - Central Excise

Zinc Ingots - the appellants cleared certain quantity of Zinc Residue Lead Slag Beta cake and Waltz kiln Slag without payment of duty claiming exemption under Notification No. 19/88-C.E. dated 1-3-98 as amended by Notification No. 27/91-C.E. dated 25-7-91. Therefore it appears that the appellants are ineligible for the benefit of exemption under the said Notification as such they are required to pay duty. Accordingly Show-Cause Notices were issued and adjudicated vide the Impugned orders. Held that - assessee availed credit under Rule 57A of erstwhile Central Excise Rules 1944 on inputs which are used in manufacture of their final product. Benefit of Notification No. 19/88-C.E. as amended by Notification No. 27/91-C.E. not to be denied.

Summary

Issues:
1. Interpretation of Notification No. 19/88-C.E. and its exemption applicability on certain goods.
2. Validity of availing modvat credit under Rule 57A for inputs used in manufacturing specific goods.
3. Dispute regarding the duty payment on Zinc Residue, Lead Slag, Beta Cake, and Waltz Kiln Slag.
4. Review of the Commissioner (Appeals) decision in setting aside the demands of duty.
5. Relevance of previous judgments and their applicability to the current case.
6. Consideration of by-products arising during the manufacturing process for duty exemption.

Analysis:
1. The judgment concerns the eligibility of certain goods, including Zinc Residue, Lead Slag, Beta Cake, and Waltz Kiln Slag, for exemption under Notification No. 19/88-C.E. as amended by Notification No. 27/91-C.E. The issue revolves around the interpretation of the notification's provisions and whether the goods qualify for exemption based on the modvat credit availed by the appellants under Rule 57A for inputs used in manufacturing these items.

2. The dispute arises from the appellants clearing the mentioned goods without duty payment, claiming exemption under the said notification. The Revenue contended that since the appellants availed credit under Rule 57A for inputs used in manufacturing these goods, they are not eligible for exemption. The Commissioner (Appeals) set aside the duty demands, prompting the Revenue to challenge the decision.

3. The Tribunal analyzed previous judgments and the specific circumstances of the case to determine the applicability of the exemption. It was observed that the by-products like Sulphur Dioxide gas, converted into Sulphuric Acid, did not entail denial of modvat credit under Rule 57D(1). The Tribunal highlighted that the mere utilization of inputs for generating by-products does not necessarily disqualify the appellants from claiming exemption under the notification.

4. The Tribunal differentiated the present case from previous rulings cited by the Revenue, emphasizing that the issue at hand was distinct and covered by the Tribunal's earlier decision in favor of the respondent company. The judgment emphasized the application of rules governing by-products and their impact on duty credit eligibility, ultimately upholding the impugned order as legally sound and rejecting the Revenue's appeal.

5. The judgment also addressed the relevance of case laws cited by both parties, clarifying that the Tribunal's detailed analysis in the respondent's previous case favored the company's position. Consequently, the Tribunal rejected the Revenue's appeal, affirming the correctness and legality of the impugned order without any deficiencies.

6. The comprehensive analysis of the manufacturing process, by-products, modvat credit utilization, and exemption provisions under the relevant notifications formed the basis for the Tribunal's decision. The judgment underscored the importance of considering the specific factual matrix of each case to determine the applicability of duty exemptions and credit provisions accurately.