LUCKY STEEL INDUSTRIES Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) THESE ROMs have been filed by the appellants on the ground that the appellants were entitled to the benefit of Notification No. 202/88 -C.E., dated 20 -5 -1988 because prior to the amendment made by Notification No. 63/91 -C.E., dated 25 -7 -1991 the words "clearly recognizable as being non -duty paid or charged to Nil rate of duty" was mentioned in the Explanation to Notification No. 202/88 -C.E. It was further argued that under Notification No. 63/91 -C.E., dated 25th July, 1991, the words "or Nil rate of duty" existing in the Explanation to Notification No. 202/88 -C.E. were deleted. In spite of the above deletion, text of Notification No. 202/88 -C.E. under the description of inputs of the table continued to mention "goods and material of Chapter 72 or Chapter 73 obtained by breaking up of ships, boats and other floating structures". It was argued that even after Notification No. 63/91 -C.E., the appellants were entitled to the benefit of Notification No. 202/88 -C.E. and accordingly the goods were exempted under Notification No. 202/88 -C.E. and their value of clearances were not required to be added under Notification No. 1/93 -C.E. as per Explanation -II to notification No. 1/93 -C.E. Further the value of clearance of the preceding financial year i.e. 1992 -93 has to be taken into consideration and not value of clearance from 1 -4 -1992 to February, 1993. It was thus argued that the order passed by this Bench [ : 2013 (291) E.L.T. 580 (Tri. -Ahmd.)j suffers from the error apparent on record which needs to be rectified. On the other hand, ld. AR argued that there is no error apparent on records because their goods were not eligible to the manufacture under Notification 202/88 -C.E. after 28 -2 -1993 when Notification No. 44/93 -C.E, dated 28 -2 -1993 was issued exempting goods and materials of Chapter 72 obtained by breaking up of ships, boats and other floating structures.

(2.) AFTER hearing the rival submissions, it is observed that Notification No. 202/88 -C.E. was amended by Notification No. 63/91 -C.E., dated 25th July, 1991 under which as per Sr. No. 15 the words "or charged to nil rate of duty" were deleted from Explanation to Notification No. 202/88 -C.E. After amendment the explanation will, thus read as follows:

(3.) IT is important to observe that Notification No. 44/93 -C.E. is an exemption notification issued under Section 5A(1) of the Central Excise Act, accordingly all ship breaking materials of Chapter 72 are clearly recognizable as non -duty paid. The goods 'chargeable to nil rate of duty' will be those situations where under the Central Excise Tariff Act, 1985 itself the duty leviable is at 'NIL' rate. Therefore, the judgments relied upon by the appellants are not applicable. Appellants have argued that even after amendment under Notification No. 63/91 -C.E., dated 25 -7 -1991, the words "goods and materials of Chapter 72 and Chapter 73 obtained by breaking up of ships, boats and other floating structures is existing in the table to Notification No. 202/88 -C.E. and they are eligible to exemption under Notification No. 202/88 -C.E. The above ship breaking materials continued to be mentioned in Col. (2) of the table under Notification No. 202/88 -C.E. after amended to cover those assessees where certain duty paid ship breaking materials of these descriptions would have been existing in the country or with the manufacturer even after the amendment by Notification No. 63/92 -C.E., dated 25 -7 -1991. Therefore, continuation of the said instruction in the said Notification even after 25 -7 -1991 was with an intention to allow the benefit of Notification No. 202/88 -C.E. for exemption to those goods made from ship breaking materials which may be existing in the country on payment of duty. No such argument has been taken by the appellants that ship breaking materials received by them was duty paid material on which duty was paid before Notification No. 44/93 -C.E., dated 28 -2 -1993. As the appellant was not entitled to the benefit of Notification No. 202/88 -C.E., clearances made from April, 1993 to February, 1994 will be required to be added to the aggregate value of clearances under Notification No. 1/93 -C.E. It is correct as argued by appellants that for entitlement of exemption for the financial year 1993 -94, value of clearances of 1992 -93 were required to be taken into consideration. Further, it is also relevant to know that under Notification No. 1/93 -C.E., dated 28 -2 -1993, the rate of duty for the year 1993 -94 depended upon two factors; (i) value of clearances during the financial year 1992 -93 (ii) value of clearances made by the appellants during 1993 -94 after crossing the exemption limit. Even after agreeing with the appellants that value of clearances during the financial year (1992 -93) was within the exemption limit, still appellants were required to pay duty during the year 1993 -94 after exemption limit got exhausted. There is nothing on record that appellants during the period April, 1993 to February, 1994 were having value of clearances less than the prescribed exemption limit. Even in the ROM application also these facts have not been brought on record by the appellants. These facts were admitted by the appellants in the case of Vinubhai Steel Co. Pvt. Ltd. wherein this Bench had held in para -10 of its order dated 18 -5 -2011 as follows: