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After amendment in the notification No.38/93-CE dated 28.2.93 w.e.f. 12.3.93 there does not exist any condition therein that weight of the product is to be taken after deduction the water contents of the product. As such in the instant case the water content or the water gain in the finished product is to be taken into consideration of determining the percentage of the fly ash used in the product. The percentage of the fly ash consumed during the aforesaid period comes to only 22.89% as against 25% declared by the assessee, which is also a pre-requisite condition for availing the benefit of nil rate of duty under notification No.38/93-CE.

4. Notification No.38/93 gave exemption to all goods falling under Chapter 68 of the Schedule to the Central Excise Tariff Act, 1985, in which not less than 25% by weight of fly ash or phospho-gypsum or both had been used. This complete exemption from duty is available to goods falling under Chapter 68 provided fly ash weighing 25% of the finished product is used in its manufacture. A question that may arise is at what stage of the finished product the percentage of fly ash is to be assessed.Goods falling under Chapter 68 should be goods which are at the stage of clearance from the factory.At the stage of clearance of these pipes which contained water are not being cleared form the factory. So, the water content which went in for setting the ash with cement is not be taken into consideration for finding out the %age of the fly ash content.

5. When the pipes are formed its quantity is entered in the log book maintained by the manufacturer. Pipe at that stage was not in a marketable stage. That pipe had to be cured in water for the requisite period. While undergoing the curing process some may crack.That cannot go in in finding the finished goods. Nor are such pipes, which are rejects, 'goods' falling under Chapter 68 of the Schedule to the Central Excise Tariff Act. This means that the goods which are ready for being cleared form the factory are the one which are entitled to claim the benefit of notification. Their weight should decided whether fly ash constitute 25% of the raw material which were used for their manufacture.In Eteernit Everest Ltd. vs. CCE, Indore 1999 (34) RLT 417, A bench of this Tribunal took the view that percentage of fly ash should be determined with reference to actual weight of the finished goods at the time of clearance and not by taking quantity of water issued at raw material stage, used for manufacture of the product. CBEC Circular No.477/43/99-CX makes it clear that the percentage of weight of fly ash has to be calculated taking into account the weight of fly ash used with reference to the weight of the finished product in dry condition. In the light of the specific pronouncement by this Tribunal and the Board's circular, there was no room for the adjudicating authority to take into consideration the water content or water gain in the finished goods for finding out the percentage of fly ash content. Commissioner in his order after referring to the decision of the CEGAT observed-

"What was sought to be established by the Department on the basis of statement given by Shri P.S.Ray was that on a perusal of the private records maintained by Shri Noor Mohammad whether it was possible to say that the percentage for the fly ash used in the manufacture of AC pressure pipes was less than 25%."

Such is not the position in the case before us.So, that decision has no application to the facts before us.

6. In view of what has been stated above we are clear in our mind that the stand taken in show cause notice, that water content was also to be taken into consideration for arriving at 25% of fly ash content which went into production of asbestos cement pipes cannot be sustained. In view of what has been stated above we do not find any ground to sustain the order passed by the Commissioner. The order impugned is set aside on account of the fact that total production of pipes as per RG-I register was 956 MTs and the quantity of fly ash which went into its production was ground 243.25 MTs, which worked out about 25%.