Exemption for ship-breaking inputs turns on exact tariff description and full-period tariff position; fresh adjudication required.

Applicability of Notification No. 208/83 to ship-breaking inputs depended on the exact tariff description of the inputs and the tariff position before and after 28-2-1986. The adjudicating authority had treated the inputs only as MS plates and had not examined whether they were bars, rods, angles, blocks, lumps or similar iron and steel forms, so the exemption issue could not be resolved on the existing record. The matter required fresh adjudication on evidence and after hearing both sides, and the department could not raise a belated plea that the inputs were non-duty paid.

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Issues: Whether the appellant was entitled to the benefit of Notification No. 208/83 in respect of inputs obtained from ship breaking, and whether the matter required remand because the adjudicating authority had not examined the correct description of the inputs and the pre-28-2-1986 tariff position.

Analysis: The dispute turned on the nature of the inputs used in manufacture. The notice proceeded on the basis that the inputs were duty paid, and the department could not at the appellate stage contend that they were non-duty paid or clearly recognisable as non-duty paid. The core controversy was whether the inputs were merely MS plates, as treated in the adjudication order, or whether they were bars, rods, angles, blocks, lumps and similar forms of iron and steel, as asserted in reply. That distinction was material because the applicability of Notification No. 208/83 depended on the specific tariff description of the inputs, and the position before and after 28-2-1986 also had to be examined separately. The adjudicating authority had considered only the new tariff and had not decided the controversy regarding the actual description of the inputs or the effect of the old tariff for the earlier period.

Conclusion: The issue of exemption could not be finally decided on the existing record, and the matter had to be reconsidered afresh after allowing evidence and hearing. The department's belated plea that the inputs were non-duty paid was not permitted.

Final Conclusion: The order confirming duty, penalty and confiscation was set aside and the matter was sent back for fresh adjudication on the correct factual and tariff basis.

Ratio Decidendi: Where the applicability of an exemption notification depends on the exact tariff description of ship-breaking inputs, the adjudicating authority must determine that description on evidence and cannot sustain the demand without examining the relevant tariff position for the entire period in dispute.

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