TMI Blog2002 (8) TMI 168X X X X Extracts X X X X X X X X Extracts X X X X ..... 4-85 to 26-7-86 6. E/821-R/95-Mum. 14,80,261.48 1,50,000 18-11-88 1-10-85 to 15-9-87 7. E/904-R/95-Mum. 8,23,097.99 85,000 7/11-7-89 6-8-85 to 27-3-87 8. E/1589-R/98 Mum. 14,38,960.29 1,50,000 3-2-87 1-8-93 to 15-12-86 3. The brief facts of the case are that the appellants are manufacturers of rolled products such as flats, bars and rods falling under TI No. 25(9)(i) of the Schedule to the erstwhile Central Excise Tariff upto 27-2-1986 and under sub-heading Nos. 7209.20 and 7209.90 of the Schedule to the Central Excise Tariff Act, 1985 for the subsequent period. These goods were manufactured from re-rollable materials obtained from ship breaking and from scrap purchased from the open market. The appellants claimed the benefit of exemption in terms of Notification No. 208/83-C.E., dt. 1-8-83 as amended which provides for exemption to specified final products made from duty paid specified raw materials. It appeared that the raw materials used by the factory of the appellants were classifiable under TI 25(3)(i) and (ii) of the erstwhile Tariff prior to 28-2-1986, and under Chapter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I), (6)(I) and (16)(I) of the said Item; iron sleepers; and tubes and pipes and blanks therefor of iron. 2. Goods falling under sub-items (6)(ii) and (iii), (7)(ii), (8), (9)(ii) and (11) of the said Item. Goods falling under sub-items (4)(ii), (6)(ii) and (iii), (7)(ii), (8), (9)(ii), (10), (11), (14) and (16)(ii) of the said Item; flats exceeding 5 mm in thickness; and hot-rolled strips, other than galvanised strips, exceeding 5 mm in thickness. 3. Plates, sheets strips, skelp, Hoop or flats not exceeding 5 mm in thickness. Tubes and pipes and blanks therefor of steel other than seamless tubes and pipes of steel. 4. Galvanised sheets, plates and universal plates. Galvanised forms falling under sub-item (13)(I) of the said Item. 5. Sheets, plates and universal plates. Forms other than galvanised forms falling under sub-item (13)(iv) of the said Item. 6. Sheets including tinned sheets. Goods falling under sub-item (13)(iii) of the said Item 2. Nothing contained in this notification shall apply to the goods which are produced or manufactured in a free trade zone and brought to any other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and reiterated in the Circular No. 125, dt. 15-5-1995. He submits that in view of the above circulars which are binding upon the Revenue, the Department cannot urge that the inputs are non duty paid for the reason that they had been cleared from the factory of the input manufacturer at nil rate of duty in terms of Notification No. 386/86-C.E., dt. 28-8-86. He therefore pleads that the impugned orders may be set aside and the appeals allowed by extending the benefit of exemption under the relevant notification. 5. Opposing the prayer the ld. DR submits that the case of the department is that the inputs used in the manufacture of final products do not fall within any of the specified Tariff Headings and the Department has not accepted that the inputs are re-rollable material. He further submits that inputs are clearly recognizable as non duty paid as the department has established that ship breaking material had been received by the factories of the manufacturers under document showing that the material had not suffered any duty but had come from the non duty paid stream. He seeks to distinguish the Larger Bench decision in the case of Adarsh Steel Re-rolling Mills supra on the gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rack construction and as such they would fall under sub-item (11) of the new Item No. 25 which covers unspecified angles, shapes and sections and hence, the same may be treated as inputs for the purpose of Notification No. 208/83 CE, dt. 1-8-83". The Bench has rejected the contention of the Revenue that the inputs in question are waste and scrap not included within the purview of the relevant notifications, holding that waste and scrap would cover only waste and scrap generally used for re-melting, and that re-rollable scrap which is not for re-melting will have to be classified in other appropriate headings. 7. In the cases before us although the source of re-rollable scrap is different namely that it is ship breaking scrap and not scrap obtained from breaking up of condemned railway engines, that, to our minds would make no difference to the basic issue namely as to whether re-rollable scrap is eligible to the benefit of Notification No. 208/83. Applying Circular dt. 8-9-83 and Baroda Collectorate Trade Notice No. 97/83, dt. 6-8-83 we hold that the inputs received by the appellants fall either under sub-item (9) or (11) of Tariff Item 25 and hence fall within the specified inpu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shed goods if made from materials on which the appropriate amount of duty of excise has already been paid will not apply to goods made out of raw material on which no duty is paid either because it is not liable to excise duty or because such duty is nil. The Court has held that due emphasis must be given to the words "has already been paid". The Apex Court has overruled the earlier decision in the case of Collector v. Usha Martin Industries [1997 (94) E.L.T. 460 (S.C.)] in which a contrary view was taken. Going by the Dhiren Chemical Industries judgments ld. DR is correct in his second objection to the extension of benefit of Notification No. 208/83 to the appellants. However we find that when the Dhiren Chemicals Industries case came up before the Bench for disposal of appeals after decision on the reference, the Court held that :- "The issue involved in these appeals is covered by the decision of a Constitution Bench in Collector of Central Excise, Vadodara v. Dhiren Chemical Industries [2002 (2) SCC 127]. The Constitution Bench interpreted the phrase "on which the appropriate amount of duty of excise has already been paid" in favour of the Revenue. However, it held that, rega ..... X X X X Extracts X X X X X X X X Extracts X X X X
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