1991 (12) TMI 58 - SC - Central Excise

Supreme Court clarifies duty exemption rules for copper and alloys in pipe manufacturing.

MULTIMETALS LTD. Versus ASSISTANT COLLECTOR, CENTRAL EXCISE

The Supreme Court interpreted a Notification granting exemption from excise duty on copper and copper alloys used in manufacturing pipes and tubes. The ... Whether the duty referable to that portion which is lost also should get rebate while assessing for excise duty on the pipes and tubes of copper and copper alloys? Held that:- No doubt that even the manufacturing loss will have to be taken into account in determining the relief to be provided under the said Notification. We are also unable to understand the argument of the Revenue based on the difficulty in arriving at the manufacturing loss. If there is any difficulty it is for the manufacturer who claims the relief to prove the loss. There are also scientific methods of arriving at the loss, Allow the appeal set aside the order of the High Court and the Revenue Authorities and direct the respondents to give the benefit of exemption of duty in respect of loss in the process of manufacture. Issues: Interpretation of Notification granting exemption from excise duty on copper and copper alloys used in manufacturing pipes and tubes.The judgment by the Supreme Court involved the interpretation of a Notification granting exemption from excise duty on copper and copper alloys used in the manufacture of pipes and tubes. The appellant claimed exemption on the entire quantity of raw material used, including manufacturing loss, while the Department contended that exemption was only applicable to the quantity of copper contents in the finished products. The Court considered the Notification's language and intent, emphasizing that duty exemption should be based on the duty paid on the raw material used in manufacturing. The Court rejected the Revenue's argument that only the quantity forming part of the final product should be considered for duty rebate, stating that the relief should be given based on the duty paid on the input material. The Court referenced a previous judgment to support its interpretation. The Court concluded that even manufacturing loss should be taken into account for determining the duty exemption under the Notification. The Court allowed the appeal, set aside the High Court's order and directed the Revenue Authorities to provide the benefit of duty exemption for the manufacturing loss. No costs were awarded in the matter.