Ship-breaking scrap classification turned on the specific tariff entry, and the claimed exemption and duty-bar defence failed.

Ferrous waste and scrap obtained by ship-breaking fell under the specific tariff heading for goods and materials obtained by breaking up ships, not the general waste-and-scrap heading. The claimed exemption under Notification No. 171/88-C.E. was unavailable because the goods did not meet the notification's stated coverage or use conditions. The duty demand was not barred, as the wrong exemption and non-levy were treated as recoverable within the statutory limitation period, and the approved classification list did not prevent recovery.

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Issues: (i) Whether ferrous waste and scrap obtained by ship-breaking was classifiable under Heading 72.30 rather than Heading 72.04; (ii) Whether Notification No. 171/88-C.E. granted exemption to such goods; and (iii) Whether the demand of duty was barred or otherwise unsustainable because the approved classification list had been acted upon.

Issue (i): Whether ferrous waste and scrap obtained by ship-breaking was classifiable under Heading 72.30 rather than Heading 72.04.

Analysis: Heading 72.30 specifically covers goods and materials obtained by breaking up of ships, boats and other floating structures, while Heading 72.04 is of wider and more general import for waste and scrap. In classification, the specific entry prevails over the general entry. The goods declared by the assessee arose from ship-breaking and therefore fell within the specific heading.

Conclusion: The goods were correctly classified under Heading 72.30, against the assessee.

Issue (ii): Whether Notification No. 171/88-C.E. granted exemption to such goods.

Analysis: The notification, as amended, did not extend exemption to goods falling under Heading 72.30 in the manner claimed by the assessee. The table showed that the relevant entries either excluded goods and materials obtained by breaking up ships or limited the exemption to goods intended for ordnance factories or other specified uses. The assessee's goods did not satisfy those conditions, and no other exemption was shown to apply.

Conclusion: The exemption under Notification No. 171/88-C.E. was not available, against the assessee.

Issue (iii): Whether the demand of duty was barred or otherwise unsustainable because the approved classification list had been acted upon.

Analysis: The non-levy of duty was treated as arising from human error, and the demand was held to be within the permissible period under Section 11A. The approved classification list did not prevent recovery of duty where the exemption had been wrongly granted and the notice was otherwise within time.

Conclusion: The duty demand was not barred, against the assessee.

Final Conclusion: The classification and denial of exemption were upheld, and the duty demand was sustained, leaving no ground to interfere with the impugned order.

Ratio Decidendi: For ship-breaking scrap, the specific tariff heading prevails over the general waste-and-scrap heading, and an exemption notification cannot be invoked unless the goods and the stated conditions squarely fall within its terms; a wrongly granted exemption can also be recovered within the statutory limitation period.

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