Customs, Excise and Gold Tribunal - Delhi
Eastern Metal And Ferro Alloys Ltd. vs C.C.E. on 4 December, 1995
Equivalent citations: 1996(86)ELT104(TRI-DEL)
ORDER Lajja Ram, Member (T)
1. These are two appeals filed by M/s. Eastern Metal and Ferro Alloys Ltd., Cuttack being aggrieved in one case with the adjudication order dated 12/27-9-1985 passed by the Collector of Central Excise & Customs, Bhubaneshwar and in the other by the Order-in-Original dated 2-7-1990 of the Collector of Central Excise and Customs, Bhubaneshwar. As in both these appeals, issue of duty liability of ferro alloys is concerned, they were heard together and are being disposed of by this common order.
2. The matter was heard on 15-11-1995 when Shri A.N. Haksar, ld. Sr. Advocate with Shri R. Sudhendra and Shri Gopal Prasad, Advocates appeared for the appellants. Shri G.D. Sharma, JDR appeared for the respondents.
3. The matter in both these cases relates to the duty liability on ferro alloys and whether the goods in question were manufactured with or without the aid of power. The ld. Sr. Advocate stated that they had produced ferro alloys by the Alumino Thermic Process and in this process, use of power is not required and that they had not used the power in the process of manufacture. The Revenue has taken a stand that power has been used for running the hoist and for some other processes which according to him did not come within the scope of the process of manufacture of ferro alloys. In fact one of the items mentioned is the Blower which was not used in the process of manufacture of ferro alloys but in the manufacture of Aluminium powder. The period involved in these proceedings is from 1-4-1984 to 15-8-1985 and the goods were covered by the Exemption Notification No. 209/83-C.E., dated 1-8-1983. At no stage there had been any suppression on their part and the extended period of limitation could not have been invoked. Their whole of the production is supplied to the steel plants and the goods were otherwise eligible for exemption, of course, subject to the Chapter X procedure. ld. Sr. Advocate submitted that there was no incentive for them for not paying any duty and pleaded for acceptance of the appeals.
4. Shri G.D. Sharma, Ld. JDR referred to the process of manufacture as given in the memo of appeal filed by the appellants themselves and submitted that the ferro alloys could not be produced without the use of power in one way or the other. He stated that power was used for heating of the plate on which the processing was undertaken. He also added that aluminium powder was used in the process of manufacture and such product could not be produced without the aid of power. In view of this, the ld. JDR reasoned that it could not be said that the ferro alloys were produced without the aid of power. He also referred to the findings of the Collector who had adjudicated the matter that power was used in blowers, hoist etc. He pleaded for the acceptance of the orders passed by the Collector.
5. We have carefully considered the matter. It is admitted that the appellants are manufacturing ferro alloys by Alumino Thermic Process. Under Exemption Notification No. 209/83-C.E., dated 1-8-1983, ferro alloys enjoy 'nil' rate of Central Excise duty if manufactured without the aid of power and employing the Alumino Thermic or Thermit appliance. This exemption itself shows that ferro alloys could be manufactured without the aid of power. The appellant has employed Alumino Thermic Process which is also covered by the condition governing the exemption.
6. We have gone through the technical literature on record and we find that the ferro alloys could be produced without the aid of power. If the aluminium powder which is used in the processing of the raw materials to manufacture ferro alloys is made with the aid of power, it cannot take away the goods in question - ferro alloys from the purview of exemption if ferro alloys themselves are not made with the aid of power. The use of power in the blower or in the hoist which do not directly participate in the process of manufacture of ferro alloys may also not be material to deny the exemption.
7. Ferro alloys are an important input in the manufacture of steel. Under the old Central Excise Tariff, they were covered by Item No. 68 and input relief was provided when such ferro alloys were used in steel manufacturing. Subsequently when three items of the Tariff 25, 26 and 26AA were clubbed under Item No. 25, ferro alloys were specifically included in Item No. 25 of the Tariff. Under the revised scheme also, ferro alloys when used in the steel industry were eligible for exemption. Under Notification No. 198/84-C.E., dated 13-9-1984, ferro alloys other than Ferro Molybdenum enjoy exemption from duty if used in the manufacture of dutiable iron and steel and products thereof. This exemption was subject to Chapter 10 procedure. It is also seen that subsequently in the year 1985 vide amending Notification No. 216/85, dated 7-10-1985, exemption was provided if ferro alloys were manufactured by employing the Alumino Thermic or the Thermit process irrespective of whether power is vised or not.
8. There is nothing on record to show that the ferro alloys are not used in the iron and steel industry. The use of power for activities not related to the manufacturing process cannot be the ground for denying the exemption.
9. Taking all the relevant considerations into account both the appeals are allowed . The appellants have also contended that a part of the demand is also hit by limitation. As we have come to a decision that the goods were otherwise eligible for exemption under the relevant exemption notification, we are not passing any orders on the issue of limitation.
10. Accordingly both the appeals are allowed with consequential relief, if otherwise admissible under law.