1998 (11) TMI 228 - AT - Central Excise

Tribunal grants relief in duty payment case due to burden of proof on Revenue.

SAGAR BROTHERS Versus COLLECTOR OF CENTRAL EXCISE, RAJKOT

SAGAR BROTHERS Versus COLLECTOR OF CENTRAL EXCISE, RAJKOT - 1999 (106) E.L.T. 186 (Tribunal) Issues:Clearances of Brass Rods without payment of duty under exemption Notification No. 174/84, manufactured from waste and scrap of brass.Analysis:The judgment pertains to four appeals concerning the clearances of Brass Rods without duty payment by a company under a specific exemption notification. The notification in question, No. 174/84, as amended by Notification No. 76/86, required that the inputs used in manufacturing be duty paid. The impugned order alleged that over 460 M. Tonnes of brass rods were produced from non-duty paid materials, leading to a demand for duty payment and penalties.The appellant argued that they were job workers supplied with waste and scrap materials by others for metal recovery. They contended that as per the notification, all inputs in the country were presumed duty paid unless clearly identifiable as non-duty paid. The burden to prove non-duty paid status rested with the Revenue, which they failed to discharge. The appellant highlighted that the order was based on speculation that the inputs were non-duty paid, contrary to the facts presented. They emphasized that the materials were not exempt from duty, as indicated by the suppliers' testimonies and the order's own observations.Upon review, the Tribunal noted that the exemption notification considered all inputs as duty paid unless identifiable as non-duty paid. In this case, the inputs were a mix of various scrap types, making it challenging to determine their duty payment status accurately. The order failed to categorize and identify materials by source to establish non-duty paid items conclusively. Additionally, the records indicated that the materials were not solely brass dross, which could be deemed non-duty paid. Consequently, the Tribunal found the demand for duty and penalties unjustified, as the inputs were not clearly recognizable as non-duty paid. As a result, all appeals were allowed, the impugned order was set aside, and the appellants received consequential relief.This detailed analysis of the judgment showcases the application of legal principles, interpretation of exemption notifications, burden of proof, and the Tribunal's reasoning leading to the decision in favor of the appellants.