1992 (2) TMI 199 - AT - Central Excise

Tribunal rules in favor of appellant, exempting duty on waste & scrap in aluminium manufacturing.

BANCO ALUMINIUM LTD. Versus COLLECTOR OF CENTRAL EXCISE

The Tribunal ruled in favor of the appellant, setting aside the demand for duty on waste and scrap generated during the manufacture of aluminium extruded ... Aluminium extrusions manufactured from duty paid aluminium ingots/billets Issues:1. Time limitation for raising demand under Section 11A.2. Classification of waste and scrap under Notification 34/81.3. Precision and specificity of show cause notice.4. Interpretation of Notification No. 271/82.5. Limitation for filing application under Section 35E.Analysis:1. The appeal was against an order demanding duty on waste and scrap generated during the manufacture of aluminium extruded shapes and sections. The issue of time limitation under Section 11A was raised, arguing that the demand for the period August 1982 to May 1983 was barred by time as the proviso to Section 11A was not mentioned in the show cause notice. The appellant contended that the entire information was within the knowledge of the Department, challenging the validity of the demand based on timing.2. The classification of waste and scrap under Notification 34/81 was a crucial point of contention. The appellant argued that waste and scrap generated during the manufacturing process, exempt from duty under Notification 34/81, should not be subject to duty demands. The classification list approved by the Department supported this claim, emphasizing that the waste and scrap were covered under the exemption notification, highlighting the exemption basis for the Department's demand.3. The precision and specificity of the show cause notice were challenged by the appellant. It was contended that the notice demanding duty on waste and scrap could not be supplemented by fresh reasons in the impugned order, which shifted the demand to finished products. Citing legal precedents, the appellant argued that the adjudicating authority cannot go beyond the scope of the show cause notice and introduce new demands not initially stated, emphasizing the importance of clarity in show cause notices.4. The interpretation of Notification No. 271/82 was a central issue in the appeal. The appellant asserted that the waste and scrap used in conjunction with ingots and billets should be deemed duty paid under the notification. Legal decisions were referenced to support this argument, emphasizing that the exemption under the notification should not be denied based on the mix of duty paid and non-duty paid materials, highlighting the appellant's stance on the correct interpretation of the notification.5. The issue of limitation for filing an application under Section 35E was raised, questioning the jurisdiction of the Collector to authorize an application after one year. Despite a previous decision against the party on this matter, the appellant sought to place this point on record, challenging the timeliness and jurisdiction of the application under Section 35E.In the final judgment, the Tribunal found in favor of the appellant, setting aside the impugned order and allowing the appeal on the basis that the benefit of exemption under Notification No. 271/82 could not be denied for the aluminium extruded shapes and sections. The decision rested on the interpretation of legal precedents and the application of relevant notifications, leading to the allowance of the appeal with consequential relief.