2000 (2) TMI 319 - AT - Central Excise

Summary

Issues:
Classification of M.S. Bars under Central Excise Tariff sub-heading 7214.90 for exemption from duty under Notification No. 202/88.

Detailed Analysis:
The appellants filed a classification list for M.S. Bars (Round) and M.S. Bars (Rectangular) under sub-heading 7214.90, seeking exemption from duty as per Notification No. 202/88. However, a show cause notice was issued proposing denial of the exemption due to the inputs not matching the specified criteria in the notification. The Assistant Collector concluded that the inputs were purchased from waste and scrap market, not qualifying as prescribed inputs under the notification, thus denying the exemption. Consequently, demands were raised and confirmed for the respective periods. The Commissioner (Appeals) determined that the inputs, old and used re-rollable material, did not fall within the specified categories in the notification, leading to the denial of the nil rate of duty for the final products, M.S. Iron (Rounds) and rectangular. The demand for one period was dropped, citing goods clearance under an approved classification list, while the demand for the other period was confirmed.

The main contention revolved around the classification of re-rollable materials under Sl. No. 2 of Notification No. 202/88. The appellant argued that re-rollable materials should be covered by the notification, citing a Tribunal decision in a similar case. On the contrary, the Revenue relied on precedents where it was held that old re-rollable scrap did not qualify as specified inputs under the notification, supporting the denial of the benefit of the notification. The Tribunal examined the case laws presented by both sides and noted that previous judgments established that old re-rollable scrap did not meet the criteria specified in the notification, thus disqualifying the appellants from the nil rate of duty benefit. The Tribunal differentiated the present case from the precedent cited by the appellant, emphasizing that the nature of inputs in the current scenario did not align with the conditions outlined for eligibility under the notification.

Conclusively, the Tribunal ruled that the appellants were not entitled to the benefit of nil rate of duty under Notification No. 202/88 as the inputs did not meet the specified criteria. The demand was confirmed, and the appeal was rejected based on the findings of the case laws and the lack of alignment between the inputs and the notification requirements.