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TMI Blog2014 (5) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... thout undergoing the process of melting in the manufacture of goods falling under Chapter 72 or Chapter 73 are eligible for deemed credit at the rate of Rs.9.20 per M.T? (iv) Whether the benefit of Notification no.202/88 C.E dated 20.5.88 can be denied when the rails purchased by the railways are admittedly rollable or re-roll able materials and by serial and by serial no.2 A in the table annexed to the Notification no.202/88 the rollable or re-rollable materials are specified as inputs in the manufacture of bars and rods of Iron or steel for the purpose of granting exemption to the said bars and rods and the final product manufacture by the applicant viz. M/s round bars are specified as final products in the aforesaid Notification? The applicant is a manufacturer of 'MS round bars' manufactured from the old rails purchased from Railway through auction as raw material. The applicant claimed the benefit of notification no.202/88-C.E dated 20.5.1988 in respect of their final product. The applicant had cleared their final product from the period October 1993 to February 1994. A show cause notice was issued to the applicant to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccepting the case which was set up by the applicants. He has referred to an order of the of the Tribunal also in this regard. Shri R.C.Shukla, learned counsel appearing for the department submits that a finding has been recorded by the Adjudicating Authority that raw material was not duty paid, hence the benefit of the notification was rightly denied. He has further submitted that Tribunal has rightly relied on the Larger Bench judgment reported in 1996(83) E.L.T 576 (Tribunal) Machine Builders versus Colelctor of Central Excise, Bolpur. We have heard the learned counsel for the parties and perused the record. The issue raised in the present case is with regard to interpretation of the notification dated 20.5.1988. It is useful to quote the said notification at page no. 27, 28 of paper book. "Exemption to certain final products of Iron and steel made from specified input materials and falling under Chapter 72 or 73 or heading 84.85.- In exercise of the powers conferred by sub-rule (1) of rule 8 of the Central Excise Rules, 1944, and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by forging) of (i) non-alloy steel, (ii) stainless steel and (iii) other alloy steel; pieces roughly shaped by rolling iron or steel; rails, sleepers (cross-ties); ingot moulds of steel falling under Heading No.84.54. 3 Ingots, bars, rods and other rollable or re-rollable material, of iron and steel other than stainless steel. Bars and rods of iron and steel other than stainless steel, not further worked than hot rolled, hot drawn or hot extruded but including those twisted after rolling or cold rolled or cold form/cold finished (excluding bars and rods plated or coated with zinc or other based metals); angles, shapes and sections of iron or non-alloy steel (other than slotted angles and slotted channels); wire of steel other than stainless steel (excluding electric resistance wire and electric resistance heating wire)". The explanation to the notification as quoted above clearly indicate that all inputs except such stocks as are recognizable as being non- duty paid, shall be deemed to be the inputs on which duty has already been paid. Old rails which were purchased by the applicant in auction from the Railways cannot be treated to be stock clearly recognizable as b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Excise Act and Rules framed thereunder. The petitioners filed show cause reiterating that they were entitled to the benefit of Notification No.202 of 1988-C.E., dated 20-5-88 as amended by subsequent Notification No. 33 of 1992-C.E., dated 1-3-92 as they were using unserviceable rails, fishplates etc. classifiable under Chapter 73 of the Central Excise Tariff Act, 1985 purchased in auction directly from the railways and consequently the duty paid nature of the said goods cannot be doubled. It was the case of the petitioners that the railway had paid excise duty at the time of purchase of the goods and after use of the same were auctioned in the same conditions as unserviceable goods. Any item which is duty paid does not become non-duty paid by mere prolonged use of the same. Respondent No.2 passed adjudication order as contained in Annexure-4 to each writ petitions holding that the petitioners did not correctly declare the nature and character of the inputs and they suppressed the facts and illegally claimed the benefit of exemption under the Notification. It was also held by respondent No.2 that the extended period of limitation could be invoked in the cases as the facts w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The aforementioned materials are used in construction of railway track, which are excisable goods and cannot be cleared without payment of excise duty. Therefore, the duty paid nature of the railway auction by the railway shall have to be presumed in terms of the Explanation to the Notification aforesaid, which reads as follows : 'Explanation - For the purposes of this notification all stocks of inputs in the country except such stocks as are clearly recognizable as being non-duty paid, shall be deemed to be inputs on which the duty has already been paid.' 10. From perusal of the explanation to the aforesaid notification it is' clear that the burden of establishing that the inputs were non-duty paid and the petitioners were, therefore, not entitled to the benefit of the notification as aforesaid shall be on the Department failing which their duty paid character shall be presumed or deemed to be inputs on which the duty has already been paid. Thus, there is substance in the submission of Sri A.P. Mathur that the onus was on the Department to prove that the goods have not suffered duty or that the same are recognizable being non-duty paid. Mere auctioning by the railway ..... X X X X Extracts X X X X X X X X Extracts X X X X
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