Customs, Excise and Gold Tribunal - Delhi
Rathi Ispat Limited vs Collector Of Central Excise on 1 January, 1988
Equivalent citations: 1988(16)ECC62, 1988(17)ECR616(TRI.-DELHI), 1988(35)ELT486(TRI-DEL)
ORDER P.C. Jain, Member (T)
1. Short question involved in this appeal is whether duty paid on Cast Iron moulds under Central Excise Tariff Item 68 would be allowed to be set off under Notification 201/79, dated 4.6.1979 even if the cast iron moulds had been used for the purpose of moulding and scrapped after such use. These scrapped cast iron moulds are used in the manufacture of steel ingots by the appellants.
2. Lower authorities below have held that such set off duty is not available in terms of Section 201/79 on the ground that what is being used by the appellants in the manufacture of steel ingots is not new cast iron moulds; but only a scrap; such cast iron moulds after having been scrapped do not continue to fall any longer under Tariff Item 68, but they fall under Tariff Item 26.
The appellant on the other hand contends that scrapped cast iron moulds continued to remain cast iron moulds falling under Tariff Item 68 and therefore, duty paid on such cast iron moulds is entitled to be set off against the duty payable on the finished tools in terms of Notification 201/79.
3. We have carefully considered the pleas advanced from both sides. We do not agree with the plea of the appellant that scrapped cast iron moulds after they have become unfit for the use of moulding purposes continue to remain Cast Iron moulds falling under Tariff Item 68. Duty, no doubt, was initially paid on cast iron moulds under Central Excise Tariff Item 68. Thereafter, the cast iron moulds were used for moulding of steel ingots. After such use of cast iron moulds, these become unfit and they are used merely as scraps in the manufacture of steel ingots. The purpose of these scrapped cast iron moulds is only for the recovery of metal contained in such moulds; the original purpose of moulding the steel ingots no longer remains. It is, therefore, apparent that what is being used in the manufacture of steel ingots is not cast iron moulds as such, but the scrap iron used for the purpose of recovery of metal therefrom. This finding of the lower authority is correct in law and facts.
4. Federal Court of India (Gwyer C.J.) in its judgment in the case re : Central Provinces and Berar Act No. XIV of 1938 reported in 1978 ELT (J 269) has held that "its (excise duty) primary and fundamental meaning in English is still that of a tax on articles produced or manufactured in the taxing country and intended for home consumption. I am satisfied that that is also its primary and fundamental meaning in India, and no one has suggested that it has any other meaning in entry 45 (List 1 of Seventh Schedule to the Constitution Act)". When the duty on cast iron moulds was initially charged under Tariff Item 68, it was because cast iron moulds were not covered by any other tariff item. Consumption of these moulds is normally for the purpose of moulding steel ingots. This consumption as moulds was completed on their being scrapped. Set off of duty paid on 'inputs' in terms of Notification 201/79, dated 4.6.1979 is permissible only if the inputs used are new or fresh, that is they have not been consumed elsewhere. Accordingly, the duty paid '¦ on Cast iron moulds under Tariff Item 68 after they have been consumed as moulds cannot be allowed to be set off when such cast iron moulds are scrapped for the purpose of recovery of the metal therefrom. In view of the foregoing discussion, there is no substance in the appeal and is, therefore, rejected.