Appellant's Duty Exemption Appeal: Remand for Reevaluation and Assessment

The Appellant was found not eligible for duty exemption under Notification No. 67/95-C.E. for cold rolled SS pattas/patties used in producing duty-free SS circles for utensils. However, the adjustment of 8% of the sale price of SS utensils paid under Rule 57CC against the duty demands on cold rolled SS pattas/patties should be allowed. The case is remanded to the original adjudicating authority for reevaluation of duty demands and assessment of exemption on scrap generated during the manufacturing process.

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Issues:
1. Whether cold rolling of hot-rolled SS strips amounts to manufacture under Section 2(f) of the Central Excise Act, 1944.
2. Eligibility for duty exemption under Notification No. 67/95-C.E. in respect of cold rolled SS pattas/patties.
3. Adjustment of the amount equal to 8% of the sale price of SS utensils paid under Rule 57CC against the duty demands on cold rolled SS pattas/patties.

Issue 1: Cold Rolling as Manufacture
The main issue is whether cold rolling of hot-rolled SS strips constitutes manufacture under Section 2(f) of the Central Excise Act, 1944. The Tribunal, in previous cases, held that cold rolling results in distinct marketable goods, thus constituting manufacture. Consequently, cold rolled SS pattas/patties are deemed excisable goods chargeable to duty. However, if the cold rolled SS pattas/patties are cleared for the production of SS circles for utensils, which are duty-free, they are not eligible for duty exemption under Notification No. 67/95-C.E., unless the scrap generated from this process is cleared on payment of duty. The original adjudicating authority is tasked with determining the quantity of such scrap cleared on duty payment.

Issue 2: Duty Exemption Eligibility
Regarding eligibility for duty exemption under Notification No. 67/95-C.E., the Appellant's contention that the scrap generated from SS pattas/patties used in manufacturing SS circles for utensils, cleared on duty payment, should be exempt is considered valid. However, the evidence of the quantity of such scrap cleared on duty needs to be presented by the Appellant for assessment by the adjudicating authority.

Issue 3: Adjustment of 8% Sale Price
The adjustment of the amount equal to 8% of the sale price of SS utensils paid under Rule 57CC against the duty demands on cold rolled SS pattas/patties is disputed. The Appellant argues that once duty is collected on the pattas/patties, no further payment should be required for the exempted SS utensils. The CCE (Appeals) disallowed this adjustment, which is deemed incorrect. Therefore, the adjustment should be allowed against the duty demands on cold rolled SS pattas/patties.

In conclusion, the Appellant is not eligible for duty exemption under Notification No. 67/95-C.E. for the cold rolled SS pattas/patties used in manufacturing duty-free SS circles for utensils. However, the adjustment of the amount equal to 8% of the sale price of SS utensils paid under Rule 57CC against the duty demands on cold rolled SS pattas/patties should be permitted. The matter is remanded to the original adjudicating authority for re-quantifying the duty demand and assessing the exemption on scrap generated from the manufacturing process.

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