2009 (3) TMI 95 - HC - Central Excise

Interpretation of Exemption for Iron & Steel in Railway Wagon Manufacturing

The Court interpreted Notification No. 89/95-CE regarding exemption claims, favoring the appellants in a case involving duty paid iron and steel products ... Waste arising during manufacture of exempted railway wagons which again are used in mfg. of wagons - On the waste and scrap generated in between, which are entirely used within the factory for recycling, the appellants have claimed exemption u/not.89/95-CE - Revenue contend that this notification is not applicable as appellants manufactured some dutiable wagons - appellants claim that portion of waste and scrap, which are used in respect of such wagons cleared on payment of duty, the appellants have proportionately paid the duty – prima facie, appellant have a good case on merits in their favour – matter remanded Issues:- Interpretation of Notification No. 89/95-CE dated 18.5.1995 for exemption claim- Whether the appellant has a good case on merits- Setting aside the Tribunal's order and remanding the matter for fresh adjudicationInterpretation of Notification No. 89/95-CE dated 18.5.1995 for exemption claim:The Court examined the case where the appellants received duty paid iron and steel products for manufacturing exempted railway wagons, leading to the generation of waste and scrap utilized in the production process. The Revenue contended that the exemption under the notification did not apply due to the manufacture of dutiable wagons alongside exempted ones. However, based on the submissions, the Court held a prima facie view favoring the appellants, indicating a proportionate duty payment for scrap used in dutiable wagons. This interpretation formed the basis for remanding the matter for fresh adjudication before the Tribunal.Whether the appellant has a good case on merits:After considering the arguments from both sides, the Court was convinced of the appellant having a strong case on merits. The Court acknowledged the contentions presented and the necessity to grant a fresh hearing before the Tribunal in accordance with the prevailing legal provisions. This assessment led to the decision to set aside the Tribunal's order and remand the case for a reevaluation of the issues raised, ensuring a fair opportunity for all parties to present their arguments.Setting aside the Tribunal's order and remanding the matter for fresh adjudication:In light of the prima facie view supporting the appellant's position and the agreement among the parties for a fresh hearing following legal procedures, the Court resolved to dispose of the appeal by overturning the Tribunal's order. The matter was remanded back to the Tribunal for a comprehensive reexamination in adherence to the applicable laws. Additionally, the Court directed all concerned parties to act upon the signed copy of the order and facilitated the provision of certified copies upon formal request, emphasizing the urgency of compliance with necessary formalities for further proceedings.