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TMI Blog2017 (6) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee M/s Jindal Saw Ltd. should have paid Customs duty or Central Excise duty on the finished products namely steel pipes, under the fact that they were granted Customs license for private bonded warehouse under Section 58 of the Customs Act, 1962, for storage of raw material without payment of Customs duty. They were also granted permission for in-bond manufacturing under Section 65 of the said Act. Being permission letter dated 16th September, 2004, subject to fulfilment of the conditions that they will follow all the provisions of manufacture and other operations under Warehouse Regulation, 1966 as amended from time to time and provisions of Act and rules made there under as amended from time to time. 2. The appellant-assessee pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e learned Commissioner (Appeals) who vide the impugned order was pleased to allow the appeal, setting aside the Order-in-Original. The learned Commissioner observed that it is not disputed that the appellant manufactured goods under bond and cleared to ONGC Ltd. on payment of Central Excise duty. During in bond manufacturing the scrap was generated which was cleared on payment of Customs duty in terms of proviso to Sub-section 2(a) of Section 65 of the Customs Act. The adjudicating authority has not disputed the payment of Central Excise duty of Steel Pipes, supplied to ONGC nor disputed the manufacturing of pipes from imported steel plates, but there is dispute that steel pipes, that is finished goods, manufactured from imported materials ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to the appellants. 5. The learned Counsel for the appellant-assessee Mr. R. Santhanam, draws my attention to the clarification by CBEC in view of which the controversy stands settled. He has drawn my attention to the clarification dated 9th May, 2006 being F. No.473/13004 LC, Ministry of finance, Department of Revenue regarding duty liability in respect of in bond manufactured goods required for the purpose of offshore oil exploration/exploitation project of ONGC. The clarification reads as follows:- "the matter has been re-examined in the board. It is now clarified that in the instant case, the end product that is pipes would be subject to the Central Excise duty leviable on the assessable value of the pipes under Section 3 of Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to pay Customs duty on scrap, as per the import price on value of the steel sheets and connectors, relatable to the weight of the imported material and the assessee have wrongly paid Customs duty at the scrap value. Accordingly, differential duty of Rs. 90,584/- was demanded on the clearance of 16.353 MT steel scrap under the provisions of Section 20 of the Customs Act. In view of my findings and clarification of the CBEC dated 09th May, 2006, I find that the show cause notice is not sustainable and accordingly the appeal succeeds and the impugned order is set aside. To sum up Appeal No.C/579/2010 CU filed by the appellant-assessee is allowed. Appeal No.E/2008/2006 filed by revenue is dismissed. The appellant-assessee shall be entitled fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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