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M/s. Radiant Metal & Alloys Pvt. Ltd. Versus Commissioner of Central Excise, Mumbai-IV

2016 (5) TMI 1204 - CESTAT MUMBAI

Entitlement for Nil rate of duty in terms of Notification No.180/88-CE dt. 13.5.1988 - Aluminium products manufactured out of waste and scrap of Aluminium purchased from open market - Held that:- the waste and scrap was procured from open market and not from any particular manufacturer. The goods procured from open market cannot be related to a particular manufacturer. It cannot be presumed that the said waste and scrap has originated without payment of duty. Therefore, it has to be accepted tha .....

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2016 - SHRI RAMESH NAIR, MEMBER (JUDICIAL) AND SHRI RAJU, MEMBER (TECHNICAL) For the Petitioner : Shri T.Chandran Nair, Advocate with Shri P.K. Shetty, Advocate For the Respondent: Shri Ashutosh Nath, Asstt. Commr. (A.R) ORDER PER : RAMESH NAIR The appeal is directed against Order-in-Appeal No. BR/52/M-IV/2005 dt. 31.3.2005 passed by Commissioner (Appeals) Central Excise, Mumbai-I, whereby the Ld. Commissioner (Appeals) rejected the appeal of the appellant by upholding the Order-in-Original No.4 .....

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if manufactured from goods falling under Chapter 76 on which the duty of excise leviable under the schedule or the additional duty leviable under the Customs Tariff Act 1975, as the case may be, has already been paid. The said goods were manufactured out of Aluminium scrap such scraps were exempted from payment of duty under Notification No. 182/84-CE dt. 1.8.1984, as amended. Show cause notice was issued alleging that the appellants are not entitled for nil rate of duty on their final product .....

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ocate appearing on behalf of the appellant submits that the exemption Notification No. 180/88-CE dt. 13.5.1988 was denied on the presumption that since the Aluminium waste and scrap is exempted under Notification No. 182/84-CE dt. 1.8.1984, the goods made out of waste and scrap clearly identifiable as non duty paid goods and, therefore the conditions of notification that the goods should be manufactured from goods falling within Chapter 76 of the Schedule on which excise duty has already been pa .....

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irectly from manufacturer and if the manufacturer clears the said waste and scrap availing the exemption Notification No.182/84 and if the document clearly shows that the waste and scrap cleared without payment of duty then only it can be contended that the waste and scrap which was used in the manufacture of final products are non-duty paid. He further submits that even the Notification No. 182/84-CE is the conditional one, which carries the condition that input which is used for the production .....

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is non-duty paid. As per the Explanation to Notification No. 180/88-CE, if no material is available or any evidence adduced by the department or appearing in any records, it has to be accepted that the waste and scrap procured by the appellant is deemed to be duty paid. Therefore the exemption Notification No. 180/88-CE should not have been denied. In support of his submission he placed reliance on the following judgments: (i) Commissioner of Central Excise, Allahabad Vs. U.P.Aluminium Indus. - .....

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(A.R.) appearing on behalf of the Revenue submits that since on the aluminium waste and scrap there is a general exemption under Notification No. 182/84-CE, all the waste and scrap are deemed to be non-duty paid. Therefore goods manufactured out of such non-duty paid waste and scraps are not eligible for the exemption Notification No. 180/88-CE. He further submits that exemption Notification No. 182/84-CE in respect of waste and scrap is clear and unambiguous. Therefore as per the plain reading .....

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Aluminium products manufactured by the appellant out of waste and scrap of Aluminium purchased from open market is eligible for exemption under Notification No. 180/88-CE. The Revenue has denied the exemption notification on the ground that the waste and scrap is exempted under Notification No. 182/84-CE. Therefore the goods manufactured by the appellant is not manufactured out of the duty paid goods. On careful reading of Notification No. 182/84-CE, we find that it carries the following condit .....

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h duty has already been paid. In view of the above Condition and Explanation, it is clear that the notification is a conditional and it may or may not be applicable based on the fulfillment of the condition. Therefore it cannot be presumed universally that all the waste and scrap available in the country are cleared under exemption Notification No.182/84-CE. In our view even if unconditional notification is available it cannot be presumed that the said notification would have been availed by all .....

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hall be deemed to be duty paid. In the present case the waste and scrap was procured from open market and not from any particular manufacturer. The goods procured from open market cannot be related to a particular manufacturer. It cannot be presumed that the said waste and scrap has originated without payment of duty. Therefore, it has to be accepted that the waste and scrap used by the appellant for manufacture of their final product is duty paid accordingly, the condition of notification No. 1 .....

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ll stocks of aluminium and products thereof in the country shall be deemed to be aluminium and products on which the duty has already been paid except such stocks as are clearly recognisable as being non duty paid. Aluminium waste and scrap being also a product of aluminium is also to be recognised as duty paid, in terms of this Explanation, unless an evidence is adduced by the Revenue that it is non-duty paid. Inference drawn by the ld. JDR on the basis of Sl. No. 3 and 4 of the Table to the sa .....

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and have perused the record as well as the case law cited. The question is whether the lower authorities are correct in holding that the impugned cast articles of aluminium are exempt from duty under Notification No. 180/88 only if the same are manufactured from goods falling under Chapter 76 on which duty of excise leviable has already been paid. It is not in dispute that the articles are manufactured through the process of casting out of aluminium scrap arising during fabrication of aluminium .....

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ropriate duty of excise has been paid or has already been paid in exemption notifications do not envisage payment of a duty when no duty is payable under law. We find that the aforesaid contentions of the appellants are well founded. The cases cited by the appellants have settled the position that the expressions appropriate amount of duty or has already been paid would mean only duty that ought to have been paid or contracted to be paid. Where such duty in terms of an exemption notification is .....

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