LexM/S. ELPHINSTONE METAL ROLLING MILLS versus COLLECTOR OF CENTRAL EXCISE, BOMBAY
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MIS. ELPHINSTONE METAL ROLLING MILLS A v. COLLECTOR OF CENTRAL EXCISE, BOMBAY MAY 5, 2004 B [S. RAJENDRA BABU, CJ., AND G.P. MATHUR, J.] Central Excises and Salt Act, 1944 : First Schedule-Tariff items No. 26A(l)(la) and 26A(2)-Copper C sheets and circles, copper wire bars, copper wire rods and castings and copper slabs and billets-Manufactured out of old copper scrap and scrap -of wire bars-Claim for exemption under Notification Nos. 7 4165-CE dated 1. 5.1965 and 119166-CE dated 16. 7. I 966-Held, unless scrap and waste can be demonstrated to have been duty paid goods, they cannot be assumed D to be so-Tribunal rightly declined to accept the claim. Show cause notice-Limitation-Held, would apply only from the date of finalisation of classification. Appellant, a manufacturer of copper sheets and circles falling E under Tariff Item 26A(2), copper wire bars, copper wire rods and castings falling under Tariff Item 26A(la) and copper slabs and billets falling under Tariff Item 26A(l), claimed exemption from excise duty under Notification No. 74/65-CE dated 1.5.1965 and Notification No. ll9/66-CE dated 16.7.1966, as amended, on the ground that these items F were manufactured out of old copper scrap and scrap of copper wire bars. Show cause notices were issued to the appellant stating that the claim for exemption/concession under the Notifications could not be accepted. The claim was rejected by the appellate authority. The Tribunal also declined to accept the claim holding that the exemption G was subject to the condition that the raw material out of which final product was manufactured should be duty paid. Aggrieved, the manufacturer filed the present appeal. It was contended for the appellant that the raw material, i.e. H 163 164 SUPREME COURT REPORTS [2004] SUPP. 2 S.C.R. A the copper scrap, had been purchased from the open market and, therefore, it should be deemed that the same was duty paid; and that the show cause notice was issued after 16 months of filing of the classification. B Dismissing the appeal, the Court HELD : 1. Unless the scrap and waste that has been used can be demonstrated to have been duty paid goods, it cannot be assumed that they are so, particularly when it cannot be said with certainty that all C scrap and waste material used had been subject to excise duty earlier. The waste and scrap was dutiable only when it is a manufactured product 11nd not otherwise. The object of exemption was to avoid cascading effect in the matter of payment of excise duty. [166-E-FJ 2. As regards the limitation, thE classification list filed by D the appellant on 25.3.1983 was not approved and a show cause notice was issued on 23.7.1984. The apF1roval was accorded only on 15.9.1984. As there was no approval of the classification list and there was no final assessment, in the circumstances of the case, the bar of limitation would apply only from the date of the finalization of the E classification. (166-G-H; 167-Al F Samrat International (P) Ltd. v. Collector of Central Excise, (1992) 58 EL T 561 and Collector of Central Excise, Baroda v. Cotspun Limited, (1999) 113 EL T 353; held inapplicable. CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3504 of 1997. From the Judgment and Order dated 8.1.97 of the Central Excise, G Customs and Gold (Control) Appellate Tribunal, New Delhi in F.O. No. 62/97-B in A. No. E/3303/87-Bl. Joseph Vellapally and Rajesh Kumar for the Appellant. A.K. Ganguli, Ms. Nisha Bagchi, P. Manish and B.K. Prasad for the H Respondent. ELPHINSTONE METAL ROLLING MILLS v. C.C.E. [RAJENDRA BABU, CJ.] The Judgment of the Court was delivered by 165 A RAJENDRA BABU, CJ. : The appe~lant 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 B falling under Tariffitem 26A(la), and (iii) Copper slabs and billets falling under Tariff Item 26A(l) out of old Copper Scrap and Scrap of Copper Wire bars. . ' It is contended by the appellant that they are entitled to claim C exemption under Notification No.74/65-CE dated 1.5.1965 as amended for the product Copper Sheets and Circles falling under Tariffltem 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 f
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