TaxTMI 
TaxTMI 
2004 (7) TMI 436
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....ow cause notice dated 12-7-85 was issued to them for imposing penalty alleging that they had not obtained Central Excise Licence and had cleared the goods without payment of duty during the period from 1-8-1983 to 8-7-1985; that thereafter a corrigendum dated 9-10-1985 was issued to the show cause notice wherein the duty amounting to Rs. 9,56,806.02 p was quantified to be payable by them; that by another corrigendum dated 28-11-1986 suppression of facts had been alleged; that another show cause notice dated 18-12-1987 was issued to them by the Collector, Central Excise widening the scope of the notice dated 12-7-85 in as much as it was alleged in show cause notice dated 18-12-87 that the angles, shapes, channels etc. used by them were classifiable under Heading 72.03 of the Schedule to the Central Excise Tariff Act, and scrap and plates under Heading 72.12; that in the show cause notice dated 18-12-87 duty was demanded for the period from 9-7-85 to 10-3-1987; that the Commissioner under the Impugned Order No. 99/1988, dated 12-4-1988 confirmed the demand of duty under both the show cause notices but did not impose any penalty as no mala fide had been brought to light. 3.1 T....
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.... the erstwhile Tariff Item 25. 3.3 The Learned Counsel has also referred to Board's Circular 27/89, dated 21-9-1989 wherein it is mentioned that "it is felt that Heading 7204 would not cover an article which could be converted into another article by hot rolling without it being necessary to remelt the metal first. The Board, therefore, concluded that Heading No. 7204 read with Note 6a to Section XV and HSN Explanatory Notes at pages 987-988 would cover only such waste and scrap as would generally be used for re-melting and consequently would not cover re-rollable scrap. Such waste and scrap which is not for re-melting will have to be classified in the other appropriate Headings of the Tariff. Therefore, the denial of benefit of exemption Notification No. 202/88, dated 20-5-88 on the grounds that re-rollable scrap is waste and scrap falling under Heading 72.04 is not correct." 3.4 She also relied upon the decision in the case of Vivek Re-Rolling Mills v. CCE, 2002 (146) E.L.T. 496 (S.C.) wherein the benefit of Notification No. 202/88-C.E. was extended to bars and M M rounds/squares manufactured out of using old and used railway materials holding as under : "In vi....
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....s one of the inputs. In reply the learned Advocate referred to Baroda Collectorate Trade Notice No. 97/83, dated 6-8-83 wherein it has been clarified that "in case waste and scrap of steel as cleared on payment of duty, the credit of such duty may be allowed under Rule 56A, when such duty paid waste and scrap is used for steel melting in another factory..... Other kinds of products hitherto commonly known as re-rollable and industrial scrap, which are used for purposes other than melting would not merit classification as waste and scrap under the new Item No. 25. These products would have to be classified under the relevant sub-items of the new Item No. 25 as per the definitions given in the Explanation to the said Item. It may be seen from the definitions for goods falling under sub-item (9) and (11) of Item No. 25, that these two sub-items are in the nature of residuary sub-items but mutually exclusive of each other. Hence any product which can not be classified under any of the other sub-items may merit classification under either of these two sub-items." 6.1 We have considered the submissions of both the sides. Notification No. 208/83-C.E. exempts final products specifi....
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....ecified in the description of inputs and as such the benefit of Notification is not available to them. On the other hand, the submissions made by the Appellants are that the waste and scrap, as defined in the Tariff, means waste and scrap of iron and steel fit only for the recovery of metal or for use in the manufacture of chemicals and as the inputs procured by them are neither used for the recovery of metal nor for use in the manufacture of chemicals, these are not waste and scrap. We find force in their submissions which are strengthened by the Trade Notices and Circulars issued by the Collectorate and Central Board of Excise & Customs. It has been clarified by the Pune Collectorate in the Trade Notice No. 147/1983, dated 25-7-1983 that the old and used and unserviceable rails which are purchased by the re-rollers for cutting and re-rolling into various products would fall under sub-item (11) of the New Item 25 and hence the same may be treated as inputs for the purpose of Notification No. 208/83. Sub-Item (11) of Item 25 of the Old Central Excise Tariff is specifically mentioned in the description of inputs in the Notification. Again Bangalore Collectorate in its Trade Notice N....