TMI Blog1996 (9) TMI 422X X X X Extracts X X X X X X X X Extracts X X X X ..... lector of Central Excise, Meerut passed the impugned order demanding the duty amount mentioned in the notice and also imposed penalty of Rs. 5 lakhs holding that they were not eligible for the benefit of duty exemption availed by them, as the same was available only for waste and scrap manufactured from Aluminium on which excise duty or as the case may be, additional duty of customs had already been paid whereas in their case they had cleared the imported Aluminium rods under an exemption Notification free of such additional duty of Customs. He rejected their contention that clearance of goods under an exemption Notification at nil rate of duty amounted to payment of duty for the purpose of Notification No. 182/84 and that it did not disentitle them for the benefit of exemption available thereunder. Aggrieved with the said findings and the demand of duty and imposition of penalty the appellants have filed the present appeal. 2. Shri V. Sridharan, learned Counsel for the appellants stated that the benefit of exemption under Notification No. 182/84, dated 1-8-1984 was available to them in respect of waste and scrap arising in the manufacture of their products using Aluminium rods i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the present case is distinguishable from the cases cited by the appellants counsel as duty was paid in such cases at some stage whereas in the present case no duty was paid at any stage. The material was clearly identifiable as non duty paid. Hence exemption was not available for the waste and scrap arising from such non duty paid rods. As they had cleared their products without payment of duty even though it was not eligible for exemption, penalty had been rightly imposed. They had recovered duty from their customers as the purchase orders showed that their prices were inclusive of excise duty. As regards the plea that Section 12D does not apply retrospectively, he submitted that nobody has a right to collect duty and keep it with him. No substantive right of the appellants had been affected. The section is only procedural in nature and scope and it is, therefore, applicable retrospectively. 4. Shri Sridharan, learned Counsel gave a rejoinder that the appellants get duty paid rods as well as exempted rods. They pay excise duty on the scrap arising from duty paid Aluminium rods. They clear such scrap on payment of duty without availing exemption as they take Modvat credit of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... L.T. 91 (Tribunal) (4) IEL Ltd. v. CCE - 1988 (35) E.L.T. 142 (Tribunal) (5) Ambika Forgings v. CCE - 1995 (78) E.L.T. 352 (Tribunal) (6) Ambika Forgings v. CCE - 1995 (78) E.L.T. 759 (Tribunal) (7) (Circular of CBEC)- 1987 (31) E.L.T. T-10 (8) Circular dated 7-9-1992 of CBEC at page 178 of paperbook. In the said circular Board had clarified that the expression duty already paid would also apply when duty paid is nil (under an exemption Notification). The Tribunal decisions have mainly followed the judgment of the Patna High Court in the Tata Yodogawa case. That case dealt with a similarly worded exemption Notification (No. 66/73-C.E., dated 1-3-1973). It was held by the Patna High Court in their judgment that the words duty already paid used in the said Notification is to be given the same meaning as given to such an expression used in Notification 150/77. A reference was made to the clarification issued by the Central Government stating assessment includes nil duty and the expression paid" has to be construed to mean contracted to be paid and it is not necessary that [some] amount of duty should have been assessed and actually paid for interpreting the said expr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g non duty paid from the stocks in the country which are deemed to be goods on which duty has already been paid. The submission is valid. Such an exclusion was not there in the notifications considered in the decisions relied upon on behalf of the appellants. Hence it is necessary to look into this question. 6. We find that this question has been considered by a Larger Bench of the Tribunal in Machine Builders and Others v. Collector of Central Excise, Bolpur and Others - 1996 (83) E.L.T. 576. It was held therein that the words `inputs clearly recognisable as being non duty paid comprehends all inputs on which it is patent that duty has actually not been paid for any reason i.e. rate of duty is stated to be nil rate in the Schedule to the Tariff Act or the inputs are wholly exempt from duty or for any reason . This view would point to the possibility of the exemption under the subject Notification not being admissible to Aluminium waste and scrap manufactured from wholly exempted Aluminium falling under 76.01 to 76.08 and 7616.90. 7. We also find that the question whether goods could be treatable as duty paid when nil duty is attracted is before the Supreme Court on a Civil A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , no suppression or mis-statement can be held out against them. The demand is, therefore, liable to be set aside on the ground of limitation. It is ordered accordingly. 9. The impugned order has pressed into service Section 11D of the Central Excises Salt Act, apparently as an alternative approach. This section requires that every person who has collected any amount from the buyer of any goods in any manner as representing duty shall forthwith pay the amount so collected to the credit of the Central Government. Such payment is to be made even if such amount is not payable as duty. It is enough for the purpose of this section if the person (manufacturer) collects any amount, as duty of excise. The invoking of this Section was assailed by the learned Counsel for the appellants on the ground that the section was not applicable retrospectively and it could not apply to past cases. It was also contended that from a reading of sub-section (2) of Section 11D along with sub-section (1) thereof would point to such amount paid by the person under the said sub-section (1) being adjusted against the amount of duty finalised on assessment. Here the assessment having already been finalised, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Excise officers are to do by way of notice, adjudication etc. when the payment is not made by the concerned person as required thereunder. The show cause notice as well as the impugned order refer to certain Gate Passes and invoices as illustrations which, as pointed out in the appeal, are of a date (30-6-1993) not covered in the period relating to the show cause notice. The appellants have contended that they are charging the same price from their customers for waste and scrap manufactured from duty paid indigenous Aluminium rods as well as from imported rods which are exempted from duty. The Collector has referred to certain invoices and Gate Passes to reach a finding that the appellants had in fact recovered a higher price as excise duty. But, as pointed out in the appeal these are stray documents numbering one or two which relate to a period not covered in the notice. Moreover, the order portion in the impugned order only seeks to confirm the demand of Rs. 7,74,792.08, under the proviso to Section 11A of the Act. This demand has been held by us to be barred by limitation. No order has been passed under Section 11D of the Act. No order thereunder is also called for in the f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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