2007 (2) TMI 529 - AT - Central Excise

Tribunal grants relief in appeals challenging denial of exemption under Notification No. 67/95-C.E.

RASHTRIYA ISPAT NIGAM LTD. Versus COMMR. OF CUS. & C. EX., VISAKHAPATNAM

The Tribunal allowed the appeals in both cases (Appeal E/1061/2005 and Appeal E/329/2006) concerning the denial of exemption under Notification No. ... Exemption Issues:1. Denial of exemption Notification No. 67/95-C.E. dated 16-3-1995 on mill steel scrape used in the manufacture of castings.2. Denial of exemption of Notification No. 67/95-C.E. dated 16-3-1995 on scrap used within the factory for manufacture of capital goods.Issue 1: Denial of exemption Notification No. 67/95-C.E. dated 16-3-1995 on mill steel scrape used in the manufacture of castings:In Appeal E/1061/2005, the appellants contested the denial of exemption on mill steel scrape used in the manufacture of castings. The Commissioner confirmed duty demand and imposed a penalty. The appellants argued that they used the manufactured machine parts in the maintenance of capital goods within the factory, thus the demands were incorrect. They relied on precedents such as RINL v. CCE, Visakhapatnam and Tata Engineering & Locomotive Co. Ltd. v. CCE, Pune. The Tribunal found in favor of the appellants, stating that the Notification did not restrict the use of capital goods for production or maintenance, and the denial of benefit was unjustified. The impugned orders were set aside, and the appeals were allowed.Issue 2: Denial of exemption of Notification No. 67/95-C.E. dated 16-3-1995 on scrap used within the factory for manufacture of capital goods:In Appeal E/329/2006, the appellants were denied the benefit of the exemption of Notification No. 67/95-C.E. dated 16-3-1995 on scrap used within the factory for the manufacture of capital goods. The appellants also raised the issue of excisable goods arising in the course of manufacturing final products being treated as final products instead of intermediate products. They cited precedents like RINL v. CCE, Visakhapatnam and CCE v. Visveswaraya Iron & Steel Ltd., along with circulars issued by the Board. The Tribunal noted that the appellants' contentions were correct, and the terms of the Notification did not specify restrictions on the use of capital goods for production or maintenance. The impugned orders were found to be against the law and the cited judgments and circulars. Consequently, the orders were set aside, and the appeals were allowed with any consequential relief.In both cases, the Tribunal emphasized that the denial of benefits under the Notification was not justified as the terms of the Notification did not impose restrictions on the use of goods within the factory for production or maintenance purposes. The judgments and circulars cited by the appellants supported their contentions, leading to the setting aside of the impugned orders and allowing the appeals in favor of the appellants.