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CASE NO.: Appeal (civil)  3504 of 1997

PETITIONER: M/s Elphinstone Metal rolling Mills

RESPONDENT: Collector of Central Excise, Bombay      

DATE OF JUDGMENT: 05/05/2004

BENCH: CJI & G.P. MATHUR

JUDGMENT: J U D G M E N T

RAJENDRA BABU, CJI   :

       The appellant is engaged in the manufacture of  (i) Copper Sheets and Circles falling under Tariff Item  No.26A (2) out of Copper Scrap and Copper Wire Bars,  (ii) Copper Wire Bars, Copper Wire rods and castings  not otherwise specified falling under Tariff Item  26A(1a), and (iii) Copper slabs and billets falling under  Tariff Item 26A(1) out of old Copper Scrap and Scrap  of Copper Wire bars.   

       It is contended by the appellant that they are  entitled to claim exemption under Notification  No.74/65-CE dated 1.5.1965 as amended for the  product Copper Sheets and Circles falling under Tariff  Item 26A(2) and exemption under Notification  No.119/66-CE dated 16.7.1966 as amended for the  products Copper Wire Bars, Copper Wire rods and  Castings not otherwise specified falling under Tariff  Item 26A(1a) and Copper slabs and billets falling  under Tariff Item 26A(1) in its classification list dated  25.3.1983 using the raw materials mentioned as  aforesaid for the relevant period.

       The Adjudicating Authority, the Appellate  Authority and the CEGAT did not accept the claim  made by the appellant.  The contention put forth  before us is that the Notification in question dated  19.8.1980 exempting manufacturer of Copper, that is  to say, plates, sheets, circles, strips and foils in any  form or size falling under Tariff Item 26A(2) in the  manufacture of which Copper in any form is used and  on the virgin copper or the copper content of the alloy,  the prescribed amount of duty of excise to be paid or  is deemed to have been paid prescribing duty at the  rate of Rs.700 PMT.

       Under Notification dated 19.6.1980, it is claimed  that the waste or scrap obtained from copper as  Copper alloy where the prescribed amount of duty of  excise has been paid on the copper or the copper  content of the alloys would be exempted from taxation  and the appellant had filed classification on that basis.

       Show cause notices were issued to the appellant  to the effect that their claims for

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exemption/concession asked for under Notifications in  question cannot be accepted.  There is the contention  of the appellant that this notice has been issued  sixteen months after the filing of the Classification.

       The Tribunal took the view that the exemption is  subject to the condition that the raw material out of  which final product is manufactured should be duty  paid, either the proof of such payment of duty on raw  materials should be appropriate or there should be a  deeming order that such raw materials are deemed to  be treated as duty paid.

       The claim of the appellant that the scrap had  been purchased from the open market and, therefore,  it should be deemed that it has been duty paid, the  Assistant Collector took the view that the products are  manufactured out of scrap purchased in the open  market for which no duty paying documents are  produced, exemption could not be extended to these  products.  The Waste and Scrap was dutiable only  when it was a manufactured product and was  otherwise excisable under the provision of the Act.  All  waste and scrap is neither a manufactured product nor  is excisable and on this basis held that the appellant is  not entitled to the benefit of the relevant Notifications.

       We think the view taken by the Tribunal cannot  be considered to be as inappropriate.  Unless the  scrap and waste are goods that had been used can be  demonstrated to have been a duty paid goods, it  cannot be assumed that they are so, particularly when  it cannot be said with certainty that all scrap and  waste material used has been subject to excise duty  earlier.  The waste and scrap was dutiable only when  it is a manufactured product and not otherwise.  The  object of exemption being to avoid cascading effect in  the matter of payment of excise duty.

       Therefore this contention on behalf of the  appellant is rejected.  So far as the question of  limitation is concerned, we find that the classification  list filed by the appellant dated 25.3.1983 was not  approved and a show cause notice was issued on  23.7.1984.  The approval was accorded only on  15.9.1984. As there was no approval of the  classification list and there was no final assessment,  we think, in the circumstances of the case the bar of  limitation would apply only from the date of the  finalization of the classification and we do not find that  the decisions relied upon by the appellant either in  Samrat international (P) Ltd. vs. Collector of  Central Excise, 1992 (58) ELT 561 or in Collector of  Central Excise, Baroda vs. Cotspun Limited, 1999  (113) ELT 353 have any application to the present  facts of the case.         Appeal, therefore, stands dismissed.