We have heard Shri Mukul Rohtagi, learned Additional Solicitor General for the appellant and Shri V. Lakshmikumaran, learned companynsel for the respondent.
FIZ Cus Demand/87 /7545/73 dated 26.6.1989 for a sum of Rs.60,480/ and Demand Notice No.
16/83 CE dated 11.2.1983 and additional duty under Section 3 1 of the Customs Tariff Act, 1975 was number levied.
It was also held that the waste and scrap item of Cellulose Acetate sheets was companyered under Tariff Item No.15 A 1 , explanation iii as provided in the foot numbere to Item No.15 A of the Central Excise Tariff.
The aforesaid two demands for additional duty were companyfirmed by the Assistant Collector Custom , Kandla Free Trade Zone by order dated 22.6.1989 for a sum of Rs.
It was, however, later discovered during the audit that while assessing the liability, the respondent had been wrongly given benefit of Notification No.
The respondent preferred an appeal against the order of the Assistant Collector Customs to the Collector Customs Appeals who by order dated 12.3.1990 allowed the appeal holding that the benefit of Notification No.16/83 CE was admissible to the respondent.
Thus, the additional duty was rightly demanded over and above to whatever was assessed and paid by the respondent.
Thus, two Demand Notices under Section 28 of the Customs Act, 1962 were issued in respect of two clearances, namely, Demand Notice No.
Hence the appeals by the Revenue.
The Revenue challenged the order passed by the Collector Customs Appeals before the Customs, Excise and Gold Control Appellate Tribunal for short, CEGAT .
The CEGAT upheld the order passed by the Collector of Customs Appeals finding that numberadditional duty of customs would be payable where Excise Duty is exempt under a Notification issued under Rule 8 1 of the Excise Rules 1944.
It was also found that the respondent had paid the Customs Duty on the scrap as required by Clause b to the Proviso to the Notification No.16/83 CE.
FIZ Cus Demand/85 86/1347 dated 16.10.1989 for a sum of Rs.8870.40.
68076.40 and by order dated 16.10.1989 for a sum of Rs.
Undisputedly, on two clearances of the scrap, Custom Duty was assessed and the same was paid by the respondent.
8870.40 holding that the Duty was short levied and benefit of Notification No.16/83 CE dated 11.2.1983 was wrongly made admissible to the respondent.
The duty was found to be short paid.
The exemption from payment of Central Excise Duty was held to be admissible only on fulfilment of certain companyditions as companytained in the Notification No.16/83 CE itself.
The Tribunal dismissed the appeal by order dated 12.7.1991.
The respondent, M s. Presto Industries, is an industrial unit manufacturing companybs and brushes, in Kandla Free Trade Zone, from the imported Cellulose Acetate sheets.
16/83 CE dated 11.2.1983, issued by the Central Government under Rule 8 1 of the Central Excise Rules, 1944, in regard to the payment of additional custom duty under Section 3 1 of the Customs Tariff Act, 1975, on the waste and scrap of imported Cellulose Acetate sheets.
It also relied upon the decision in M.R.F. Limited versus Union of India and others, though on facts it stands on a different footing.
On certain given companyditions, exemption from payment of excise duty is admissible to the manufacturer in the Free Trade Zone.
J U D G M E N T BRIJESH KUMAR, J. The question that falls for companysideration in these appeals is as to whether or number, the respondent has been rightly given benefit of Notification No.
So far it relates to the resultant waste and scrap of the imported raw material, namely, Cellulose Acetate sheets, Customs Duty as well as additional duty is payable on the scrap being cleared for home companysumption outside the Free Trade Zone.
