9911796707
TMI Blog1999 (5) TMI 367X X X X Extracts X X X X X X X X Extracts X X X X ..... . The copper wire bars imported are converted into wire exceeding 6 mm by job workers and returned to the appellant who drawn them into wire not exceeding 6 mm. The copper wire rods imported are drawn into wire not exceeding 6 mms by the appellant. A manufacturer of enamelled wire has the following options : "Take Modvat credit on the raw materials and clear the enamelled wire on payment of duty after availing Modvat credit." OR "Not take Modvat credit on the raw materials and clear the finished enamelled wires without payment of duty or exercise both the above options concurrently." Notification No. 69/86 dated 10-2-1986 was issued by the Government whereby wires made of copper were exempted from duty if they were made from wire bars/rods/wires of maximum cross-sectional dimensional exceeding 6 mm. evidencing duty of excise has been paid at the rate of not less than Rs. 6,200/- per M.T. and no Modvat credit was taken. The appellant paid duty on such enamelled wires which were produced out of raw materials on which modvat was taken. On the remainder quantity on which no Modvat credit was taken exemption was claimed when clearing the final product. Since the appellant did not ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e as well as exempted (Notification No. 69/86). This was approved after verification. On 4-8-1994, a show cause notice was issued (Page 168 of Paper Book) mentioning inter alia that appellants claimed to have winding wires manufactured by the appellants were of below 6 mm dimensions and were of non-duty paid character. Further the appellants claimed to have manufactured winding wires appearing at Sr. No. 4 of classification list out of duty paid copper wires shown at Sr. No. 2 evidently because as per the remarks column, in the classification list it was stated that the appellants would be availing Modvat credit and, therefore, winding wires at Sr. No. 3 were evidently manufactured out of copper wires at Sr. No. 1 for which they were not eligible for exemption. The appellants were solitary on this fact (see page 169). As evidenced by the particulars in the classification list furnished by them, the notice further stated that in the statement made by the assessee in the remarks column of their classification list clearly indicated that the winding wires filling under sub-heading 8544.00 manufactured on which they claimed benefit of Notification No. 69/86 where all above 6 mm diamete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from claiming exemption under the Notification 69/86. He cited various cases. He states some of which are 1989 (43) E.L.T. 183 in the case of TOMCO, 1991 (55) E.L.T. 351 in the case of Goodlass Nerolac Paints Ltd. v. C.C.E., 1996 (84) E.L.T. 108 in the case of Shalimar Paints Ltd. v. C.C.E., etc. He also invited our attention to the classification lists as well as the trade notices to show that the view of the Govt. is that the claiming of exemption and availing of the Modvat credit is a right. He emphasised the fact that from the reading of the classification list the full particulars were given to the Department and the department knew the production pattern. In fact he invited our attention to specifically to the letter, dated 24-7-1987 page 83 where the entire nature of production of the appellant has been fully mentioned. 4. On the other hand ld. Counsel Shri S.M. Shah, for the department clearly counters the arguments. He emphasised that in this case there is suppression involved. In 1987 when they wrote their letter (page 83) it does not specifically mention the correct information. The classification list at page 112 and 138 does not specifically state that the natur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d rods (including wire-rods), or wires of maximum cross-sectional dimension exceeding 6 mm of copper, on which the duty of excise leviable under the said Central Excises and Salt Act, 1944 or the Additional Duty leviable under Section 3 of the Customs Tariff Act, 1975 (51 of 1975),, as the case may be, has already been paid at a rate not less than Rs. 6,200 per tonne; or (ii) such winding wires, are made from wrought wire rods of copper, or wires of copper of maximum cross-sectional dimension exceeding 6 mm, on which the duty of excise leviable under the said Central Excises and Salt Act, 1944,, has already been paid at the rate of Rs. 2,900 per tonne, where such wire rods were cleared from a factory prior to the 1st day of March, 1988; and (b) no credit of the duty paid on goods mentioned at clauses (a) (i) and (a) (ii) above,, used in their manufacture,, has been taken under Rule 57A of the said Rules. (ii) Winding wires made of copper 25% ad valorem If used as : 2. Winding wires made of aluminium 25% ad valorem overhead (a) or underground tele-communication wires and cables; 3. Electric wires and cables of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 10-2-1986 amended by Notification No. 163/86-C.E., dated 1-3-1986 against Sr.No. 2 of the Table attached to the Notification. Col. 9 Modvat Benefit of Excise duty credit will be taken as per Notification No. 176/86, dated 1-3-1986. Shri S.M. Shah states that full particulars are not given. We cannot agree to that. He has mentioned that Modvat benefit not claimed as is revealed in remarks at Col. No. 10. As far as the case is when the Modvat is taken there is reference to the same and credit would be taken as per Notification No. 176/86. It is not understood how Shri Shah states that no particulars have been given. In fact by its letter dated 24-7-1987 it stated as under: "Copper Wire Rods covered under sub-heading No. 74.03 on which appropriate rate of duty of Rs. 6,200/- per M.T. is being paid and the same is being used for further drawing of copper wire covered under Heading No. 7405. During the drawing process of finer wire having thickness of less than 2 mm, at the intermediary stage such wire has to pass through the stage of 2 mm etc. an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terial stage to the finished stage." In the impugned order the Collector has inter alia held as follows : "These so called job workers after availing Modvat credit of duty paid on such wire bars converting the same into copper wire of cross-sectional dimension exceeding 6 mm and clear the same to the assessee on payment of duty under their regular Central Excise Gate Passes. Thus it is evidently established that Modvat Credit of goods i.e. Copper Wire Bars mentioned at Clause (a) (i) of the subject Notification 69/86 as amended has been taken under Rule 57A of the instant case...... Therefore, the allegations contained in the impugned show cause notice that the assessee had manufactured Enamelled Winding Wires out of Copper Wires of below 6 mm dimension which were also of non duty paid character and proved beyond doubt." 7. In our view, these above finding lacks substance. The basic premises of chargeability to duty has to be established in the show cause notice. It reads as under : "The assessee filed classification lists bearing No. 1/93 w.e.f. 1-3-1993 in respect of various products manufactured by them which were falling under chapter 74 and 85 of the schedule of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey described their product under Chapter Heading No. 8544.00 as under : "Enamelled Winding Wires of copper (commercially known as Super Enamelled Copper Wire) of various sizes." They also claimed nil rate of duty under Notification No. 69/93-C.E., dated 28-2-1993. To qualify for the said benefit in remarks column of their said classification list they declared as under. "Such Wires will be manufactured out of duty paid inputs as shown in the notification Modvat not availed." The assessee filed identical classification lists in the past as under : Sr. No. Year Classification No. Filed on 1. 1989-90 3/89 6-3-1989 2. 1990-91 1/90 20-3-1990 3. 1991-92 1/92 3-3-1992 4. 1992-93 -------- ---------- 5. 1993-94 1/93 1-3-1993 The statement made by the assesses in the remarks column of their classification list as above, clearly indicated that the winding wires falling under chapter sub-heading 8544.00 manufactured by them on which they claimed the benefit of Notification No. 69/86-C.E., dated 10-2-1986 as amended by Notification. No. 61/93, dated 28-2-1993 were of above 6 mm dim. Whereas, in fact the winding wires manufactured by them were of non duty character a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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