TaxTMI 
TaxTMI 
2000 (9) TMI 782
X X X X Extracts X X X X
X X X X Extracts X X X X
....Rules, 1944 read with Section 11-A of Central Excise Act, 1944 and imposed a penalty of Rs. 5,00,000/- on the appellants under Rule 173Q(1)(a) read with Rule 173Q(1)(bb) of Central Excise Rules, 1944. 2. Briefly stated vide Show Cause Notices issued under F. No.BAR/SBA/60/116, dated 4-2-1996, 1-3-1996, 27-3-1996 & 11-10-1996 covering the period July 95, August 95, September 95 to October 95 and May 96, to the appellants it was alleged that they had removed the remnants of the 'M.S. Sheets' inputs; in the form of circles/strips/pattis/off cuts at a reduced rate, describing these as waste and scrap, after discharging the duty on the said input in the manner provided under Rule 57F(4) although they were liable to pay duty on such input....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... Shri Attar submitted that the adjudicating authority however, has held that the items cleared as scrap are not in fact scrap, and therefore, clearances of the aforesaid scrap under Rule 57F(4) was not correct and that the appellants should have cleared the same goods under Rule 57F(1)(ii) as sheets from the factory after reversing modvat credit as availed on the M.S. Sheets. Shri Attar argued that it was placed before the adjudicating authority that the appellants had cleared scrap only and not M.S. sheets and therefore, no duty was payable as alleged in the show cause notice. It was also pointed out that on identical issue, the matter was before the Tribunal in their own case 1995 (75) E.L.T. 382. In this case the Tribunal relied upon an....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y changed with effect from 1-3-1988 and the definition of various section notes and chapter note of 72 has also been changed. Shri Attar vehemently opposed this contention of the Dy. Commissioner relying on the Tribunal decision in the case of Jawahar Metal Industries, - 2000 (120) E.L.T. 818 (Tri.) = 2000 (39) RLT 387(T). Shri Attar invited my attention to Para 5 of the aforesaid Tribunal decision wherein it has been held that change in definition in "waste and scrap" makes no difference for the purpose of applying ratio to the Supreme Court decision in the case of LML Ltd. Shri Attar also explained that the definition of waste and scrap was that if the goods get reused without being melted, they cannot be classified as waste and scrap. Sh....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed as 'Shapes & Sections' previously classifiable under 7210.10 (in the new tariff classifiable under 7216.90), going by the Supreme Court judgment in the case of LML Ltd. The Adjudicating Authority has distinguished the case of the appellants from the facts and circumstances in the case of LML Ltd. on the ground that subheadings of Chapter 72 of the tariff were changed w.e.f. 1-3-88 and that a new chapter Note 1(K) was also introduced from that date. Based on this new Chapter Note 1(K), the Adjudicating Authority has held that the appellant's alternate claim of classification of the subject goods under Heading 7216.90 is not acceptable. 5. In the aforesaid background it is, first of all, essential to go into the judgment of the ape....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to their customers (who are ingot manufacture), for enabling the customers to avoid modvat credit on the scrap used in the manufacture of ingots. These evidences were placed in support of their claim that subject goods have use only in remelting. 6. In view of the aforesaid evidences produced by the appellant, and in the absence of any evidence to the contrary to show that the subject goods were put to further use as such, I hold that the subject goods had no other use except for recovery of metal. Having held so, the subject goods get covered by the definition of 'waste & scrap', as given in the tariff, prior to 1-3-88 by virtue of its use only in recovery of metal, and after 1-3-88 by virtue of the goods being definitely not usab....