Exemption for aluminium scrap goods upheld where nil-rate clearance was treated as duty paid under the notification.

Aluminium cast articles manufactured from aluminium waste and scrap cleared at nil rate of duty were held eligible for exemption under Notification No. 180/88. The governing principle applied was that expressions such as "appropriate duty" or "has already been paid" in an exemption notification include duty that ought to have been paid; where the applicable rate is nil, goods cleared without payment of duty are treated as duty paid goods. As the notification itself prescribed a nil rate for aluminium waste and scrap, the exemption was allowed in favour of the assessee.

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Issues: Whether aluminium cast articles manufactured from aluminium waste and scrap cleared at nil rate of duty were eligible for exemption under Notification No. 180/88.

Analysis: The disputed articles were manufactured out of aluminium scrap arising during fabrication of aluminium bodies. The lower authorities denied exemption on the view that the scrap was not duty paid. The governing principle applied was that expressions such as "appropriate duty" or "has already been paid" in an exemption notification cover duty which ought to have been paid, and where the applicable rate is nil, goods cleared without payment of duty are to be treated as duty paid goods. The notification itself also showed aluminium waste and scrap as attracting nil rate of duty, supporting the assessee's claim.

Conclusion: The goods were entitled to exemption under Notification No. 180/88. The issue is decided in favour of the assessee.

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