CLANCEY PRECISION COMPONENTS Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) ALL these four appeals are directed against Order -in -original dt. 28.2.2006 which confirm the demand of the duty and also imposed penalties on the appellants. Since the issue involved in this case is arising out of the same order -in -originals they are being disposed off by a common order.

(2.) THE relevant facts of the case are the appellant company is a 100% EOU and procure inputs duty free either indigenously or by way of import, for use in relation to the manufacture of camshafts. One of the input procured by the appellant is Resin Coated Sand (RCS). This RCS is used to make moulds/patterns and cores, which are in turn utilized for the manufacture of camshafts. After the completion of the relevant processes, the resin coated sand after use yields burnt sand as remnant. This burnt sand is non -excisable goods and is disposed off by the appellant company. It is the contention of the Revenue that the appellant company having availed benefit of Notification No. 1/95 -CE dt. 4.1.1995 and No. 53/97 -CE -Cus. dt. 3.6.1997 are governed by the conditions at paragraph 7 and having not complied with the same are liable for payment of the Customs/Central Excise duty on the inputs procured and consumed by them. The appellants resisted the show cause notice on merits. The adjudicating authority come to the conclusion that the appellant has violated the paragraph No. 7 of the said notifications and on this conclusion confirmed demand and imposed penalties on the appellant. 2. The Ld. Advocate submits that the paragraph 7 of Notification No. 53/97 -Cus. was introduced for the purpose, to put an embargo on the consumption of the inputs which are to be consumed in the manufacture of exempted products. It is his submission that the said embargo does not apply if the final products which are manufactured by the appellants are excisable. He relies upon the decisions of the Tribunal in the case of Hanil Era Textile Ltd. as reported at which was affirmed by the Supreme Court as reported at [2005 (180) ELT A44].

(3.) THE Ld. SDR submits that the appellants have clearly violated the paragraph 7 of Notification No. 53/97 -Cus in much that the said para very clearly indicates that rejected waste and scrap material, if not excisable, Customs duty/Excise duty i.e. leviable on the inputs has to be discharged by the appellant company.