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TMI Blog1998 (11) TMI 283X X X X Extracts X X X X X X X X Extracts X X X X ..... , dated 1-8-1983. A show cause notice dated 31-8-1988 was issued for demanding duty amounting to Rs. 35,867.45 on M.S. Round bars removed during the year 1987 alleging that the finished goods were manufactured out of ship breaking scrap which was clearly recognisable as non-duty paid and consequently the benefit of Notification No. 208/83 was not available to the appellants. The Additional Commissioner in the impugned order confirmed the demand of duty and imposed penalty of Rs. 10,000/- on the appellant firm and Rs. 5,000/- on Shri Mohan Singh Birdi and Rs. 5,000/- on Shri Satyanarayan Sharma, both partners, holding that the finished goods manufactured from NIL duty paid or non duty paid ship breaking scrap would not qualify for exemption ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s :- (i) M/s. Tata Yodogawa Ltd. v. Union of India - 1987 (32) E.L.T. 521 (Cal.). (ii) M/s. I.E.L. Ltd. v. CCE - 1988 (35) E.L.T. 142 (Tribunal)= 1988 (16) ECR 177 (Tribunal). (iii) CCE v. Usha Martin Industries - 1997 (94) E.L.T. 460 (S.C.) = 1997 (22) RLT 221 (S.C.). (iv) Sunil Plastic Industries v. CCE - 1998 (98) E.L.T. 103 (Tribunal). (v) Apee Jay Industries Ltd. v. CCE - 1998 (20) CXLT 306. 4. Shri D.S. Negi, learned SDR, submitted that in Usha Martin Industries case, the Supreme Court was interpreting the expression "on which the appropriate duty of excise has already been paid" used in the notification whereas in the present Notification 208/83, under consideration, the wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cified inputs subject to the following conditions :- (i) that the final products are made from inputs on which excise duty or the additional customs duty leviable has already been paid; (ii) that no credit of the duty paid on the inputs has been taken under Rule 56A or 57A of the Central Excise Rules. 6. We observe that the Supreme Court in Usha Martin Industries case, 1997 (94) E.L.T. 460 (S.C.) = 1997 (22) RLT 221 (S.C.) was not disposed "to offer a narrow interpretation to the expression (i.e. on which the appropriate amount of duty of excise has already been paid) as excluding all cases where nil duty was paid for the input materials." The Apex Court held that "benefit of exemption from duty can legitimately be claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ditional duty leviable used in Notification No. 208/83." Further, there is no substance in the contention of the Revenue that second proviso to Notification No. 208/83 requires that the inputs must have suffered duty. The effect of second proviso is simply that the manufacturer should not have availed the Modvat/Proforma credit of the duty paid on the input. This does not imply that the inputs cannot be exempted from payment of whole of duty leviable thereon. In the light of these facts and circumstances and following the ratio of the decisions relied upon by the respondents we hold that the appellants were eligible to avail of the benefit of Notification No. 208/83 in respect of finished goods manufactured by them. We, therefore, set aside ..... X X X X Extracts X X X X X X X X Extracts X X X X
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