TaxTMI 
TaxTMI 
TaxTMI 
2010 (12) TMI 728
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....er No. 24/Commr./CE/KOL-II./Adjn./2006-2007 dated 13-6-2006 which confirmed demand of duty of Rs. 5,96,737/- with reference to show cause notice dated 27-7-05. 1.4 All these appeals involve common issues and, therefore, they are being disposed off by this common order. 2. Heard both sides extensively on 9-12-10 and 10-12-2010. 3.1 Relevant facts in appeal No. 120/05 are as follows : (a) The appellants are manufacturer of Railway wagons and wagon parts. They primarily supply wagons and wagon parts to Railways which are exempted from duty. The appellants are also supplying some quantities of wagons and wagon parts on payment of duty to parties other than Railways. The appellants manufacture the wagons and wagon parts by using iron and steel products like steel sheets, angles etc. During the course of manufacture, wastes and scraps of iron and steel arise. The appellants filed classification lists seeking classification of wastes and products under Chapter 7204.90 and sought exemption under Notification No. 67/95, dated 16-3-1995. The Department came to know that the scrap arising out of manufacture of wagon and wagon parts have been used by way of recycling no....
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....ppeal came before the Hon'ble High Court, Hon'ble High Court vide its order dated 18-3-2009 took note of the fact that order of the Tribunal dated 16-4-2008 stood set aside and accordingly held the appeal of the Department as infructuous and dismissed the same. In pursuance of the Hon'ble High Court's order dated 4-3-2009 and 14-5-2009 in the appeal by the party, and in pursuance of order dated 18-3-2009 of the Hon'ble High Court in the appeal by the Department, the appeal is taken up for fresh consideration. 3.2 The issues involved in appeal No. 301/2005 and appeal No. 542/2006 are identical to those in appeal No. 120 of 2005 except that they are being taken up for the first time for final hearing by the Tribunal. 4.1 Ld. Advocate for the appellants submits that the earlier order of the Tribunal dated 6-12-2007 was on identical issue. The Department filed appeal before the Hon'ble High Court and Hon'ble High Court vide its order dated 10th November, 2008 did not admit the appeal. Against the said order, the Department filed SLP before the Hon'ble Supreme Court which was also dismissed vide Hon'ble Supreme Court's order dated 23-7-2009. As the issue involved before the ....
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....imposition of penalty. 4.5 Ld. Advocate also submits that Notification No. 31/01 dated 1-6-2001 which amended the Notification 67/95 should be treated as retrospective in nature. In support of this claim he relies on the ratio of the decision in the case of Vandana Global Ltd. v. Commr. of Central Excise, Raipur reported in 2010 (253) E.L.T. 440 (Tri.-LB), the decision in the case of WPIL Ltd. reported in 2005 (181) E.L.T. 359 and the decision in the case of Collector of Central Excise v. M/s. Wood Craft Products reported in 1995 (77) E.L.T. 23 (S.C.). 4.6 Further the dispute involves the eligibility or otherwise of the benefit of Notification 67/95 and therefore there is no justification for imposition of any penalty merely because a view contrary to the view held by the appellant is taken. 4.7 He also submits that the entire demand for the period covered by Central Excise Appeal No. 120/05 is barred by limitation. In appeal No. 301 of 2005 involved demand by seven show cause notices. Out of this the show cause notice dated 23-3-2004 is covering the period September, 2002 to October, 2003 out of which the demand relating to the period September, 2002 to February,....
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....ist and sought for exemption under Notification 67/95. While they were clearing part of such wastes and scrap as such on sale, they were using such wastes and scrap for manufacture of dutiable wagon and wagon parts and were also using for manufacture of exempted wagon and wagon parts. But they have failed to declare specifically the use of wastes and scrap for manufacture of exempted final products viz. wagon and wagon parts. 5.5 While examining the exciseibility of any product, whether credit was available or not is immaterial. First the exciseibility should be determined and if duty is attracted, then the assessee would be entitled to credit as per law. No exemption can be claimed on the ground that the assessee has not availed Cenvat credit. Therefore, the claim by the appellants of Revenue neutrality is factually incorrect. Only when wastes and scraps paid duty and the wastes and scrap were used for dutiable wagon and wagon parts, the duty paid on wastes and scraps would be available as credit and only in such a situation the question of Revenue neutrality may arise. When duty paid wastes and scrap are used for exempted wagon and wagon parts, the question of revenue neutr....
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....2006 were pending before the Tribunal. We have not been shown that either side assisted the Tribunal by bringing to notice that there were appeals of the same appellants on identical issues pending before the Tribunal. Had this been done, multiple proceedings, could have been avoided. (c) Section 35L of the Central Excise Rules, 1944 clearly envisages that an appeal shall be to the Supreme Court from "any order passed by the appellate Tribunal relating, among other things to the determination of any question having a relation to the rate of duty or to the value of goods for the purpose of assessment". Order dated 6-12-2007 by the Tribunal decided an issue involving applicability of exemption Notification No. 89/95 dated 18-5-95. The order of the Tribunal on merits was against the party. However, the demand was held to be time barred. It is not known as to how the party filed appeal to the High Court challenging the order of the Tribunal involving question relating to rate of duty. It is also not clear as to why the Department has not raised the issue on jurisdiction before the Hon'ble High Court. The Department has also filed the appeal before the Hon'ble High Court against t....
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....ng precedent to be culled out of the said order to be followed in the present case. 7.3 Further order dated 16-12-07 by the Tribunal obviously deliberated on the eligibility of Notification No. 89/95-C.E. dated 18-5-95. In the present appeals both sides clearly agreed that the dispute involved relates to applicability of notification of 67/95. Therefore we hold that Tribunal's decision dated 6-12-2007 has no application to the issues raised before us in these appeals. 8.1 Undisputedly, the appellants classified wastes and scrap which emerged during the course of manufacture of wagons and wagon parts and claimed the benefit of Notification 67/95 dated 16-3-95. 8.2 Notification 67/95 before the amendment reads as under : In exercise of the powers conferred by sub-section (1) of section 5A of the Central Exercises and Salt Act, 1944 (1 of 1944), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts - (i) capital goods as defined in rule 57Q of the Central Excise Rules, 1944 manufactured in a factory and used within the factory of production; (ii) goods spec....
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....ble under heading Nos. 36.05 or 37.06 of the Schedule to the said Act; (iii) goods classifiable under sub-heading Nos. 2710.11, 2710.12, 2710.13 or 2710.19 (except Natural gasoline liquid) of the Schedule to the said Act; (iv) high speed diesel oil classifiable under heading No. 27.10 of the Schedule to the said Act. (iii) woven fabrics classifiable under Chapter 52 of Chapter 54 or Chapter 55 of the Schedule to the said Act. 8.3 Notification 67/95 after amendment reads as under : "Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts - (i) capital goods as defined in the (CENVAT Credit Rules, 2002) manufactured in a factory and used within the factory of production; (ii) goods specified in (column (1) of the Table hereto annexed (hereinafter referred to as 'inputs') manufactured in a factory and used within the factory of production in or in relation to the manufacture of final products specified in (column (2) of the said Table; (from the whole of the duty of excise leviable thereon which is specified in the Schedules to the Central Excise Tariff Act, 1985 (5 of 1986) or ....
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.... dated 16-3-95, it is to be noted that the goods manufactured by an assessee for use in their own factory, referred to as "inputs" were eligible for exemption subject to the condition that the said inputs are used in the manufacture of final products on which duty was paid. In the present case, the duty demand relates to wastes and scrap used in manufacture of wagon and wagon parts on which duty was not paid. Therefore the wastes and scrap (which are referred to as inputs) having been used for exempted products have not fulfilled the conditions for grant of exemption under the notification. 9.3 The amendment by Notification 31/01 dated 1-6-01 prescribing a condition that exemption was not applicable unless the obligation under Rule 6 have been fulfilled also cannot help the case of the appellants. Amendment cannot be considered to be clarificatory in nature. The decisions relied upon by the Ld. Advocate as in the case of Vandana Globals specifically relate to amendments which were described as clarificatory in nature. The appellants were not in the CENVAT Scheme and therefore the question of fulfillment or non fulfillment of the obligation does not arise. It is undisputed fac....