SAIL Vs. COMMISSIONER OF C. EX., RANCHI

JUDGEMENT

(1.) HEARD both sides. With the consent of both sides, these groups of appeals relating to the same appellants M/s. SAIL (Bokaro Steel Plant) are taken up together for common hearing and disposal. Several of these appeals involve rejection of claim of the appellants to the benefit of exemption under Notification 67/95 dated 16 -3 -95 in respect of the inputs manufactured by the appellants and used within the factory of production. Several other appeals relate to rejection of claim of the appellants for Modvat credit in respect of inputs and in some cases capital goods. A few of these appeals involve both the questions denial of exemption under Notification 67/95 as well as denial of Modvat credit.

(2.) THE appellants have used steel products manufactured by them such as hot rolled sheets, plates etc. for the manufacture of goods like bottom plates, splash plates and some other items which are used in or in relation to manufacture of finished goods, which are dutiable. The intermediate goods like bottom plates, splash plates etc. are eligible for exemption and have been granted exemption and hence there is no dispute about the same. However, since these goods have been exempted, the Department has denied the exemption to the hot rolled sheets, plates etc. used in the manufacture of such exempted goods. The appellants are claiming exemption in respect of such impugned goods under Notification 67/95 on the ground that the exempted goods being intermediate goods, the proviso under the said Notification has no applicability since the finished goods are dutiable.

(3.) IN some of the cases, the appellants are using iron and steel products produced by them for manufacture of castings. These castings are meant for manufacture of machine parts which are used for replacement of worn out parts of machineries which are used for production of dutiable finished goods. In some of the cases, the appellants have used some iron and steel products directly for manufacture of machine parts. In all such cases, there is no dispute regarding the exemption to such machine parts as the same are considered to be capital goods which are exempted under the said Notification 67/95. The Department has denied the exemption to the iron and steel products and castings used for the manufacture of such machine parts on the ground that the machine parts are exempted. Here again, the claim of the appellants is that since the machine parts are intermediate goods used in relation to the manufacture of finished goods, the proviso under Notification 67/95 is not applicable and they are entitled to the exemption under the said Notification.