Exemption for unmachined castings does not cover proof-machined goods; unresolved factual issues were remanded for verification.

Exemption for unmachined castings under Notification No. 275/88 was confined to goods that had not been machined; proof-machined castings therefore remained outside the notification, and the denial of exemption for the admittedly machined items was upheld. Where a separate factual plea was raised that SG iron castings and spacer rings had not undergone proof-machining, but no finding existed on that point, remand for jurisdictional verification was required. The benefit of the notification was to be granted if the fresh factual inquiry showed no proof-machining.

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Issues: (i) Whether proof-machined castings were eligible for exemption under Notification No. 275/88 as unmachined castings. (ii) Whether the question whether SG iron castings and Spacer rings had undergone proof-machining required remand for verification.

Issue (i): Whether proof-machined castings were eligible for exemption under Notification No. 275/88 as unmachined castings.

Analysis: The exemption was confined to unmachined castings, and the clarification in Circular No. CBEC 24/89 extended the benefit only to castings subjected to fettling and not to machining. The goods in question had admittedly been machined, and the cited Tribunal decision did not hold that proof-machined castings continued to be unmachined castings for purposes of the notification.

Conclusion: The benefit of Notification No. 275/88 was not available to the admittedly proof-machined items, and the denial of exemption was upheld.

Issue (ii): Whether the question whether SG iron castings and Spacer rings had undergone proof-machining required remand for verification.

Analysis: A specific plea had been raised that these two items had not undergone proof-machining, but no finding had been recorded on that factual aspect. As the record was insufficient to determine the question conclusively, verification by the jurisdictional authority was necessary.

Conclusion: The issue was remanded to the Jurisdictional Assistant Commissioner for factual verification, and the benefit of Notification No. 275/88 was directed to be extended if no proof-machining was found.

Final Conclusion: The order sustained denial of exemption for admittedly proof-machined goods while sending back the factual question relating to the remaining two items for fresh verification.

Ratio Decidendi: A notification granting exemption to unmachined castings does not extend to goods that have undergone machining, and where a distinct factual issue has not been found upon, remand for verification is appropriate.

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