- (1.) HEARD Shri A.P. Mathur, learned counsel for the appellant and Shri R.C. Shukla appearing for the respondent. In this Central Excise Reference, following are the questions which have been referred for consideration: (i) Whether the benefit of Notification No. 202/88 -C.E., dated 20 -5 -1988 can be denied when Railways have paid duty on the auctioned old rails while purchasing the same and the same has been sold to the applicant as such? (ii) Whether the duty paid goods after being discarded becomes non -duty paid by lapse of time and extensive use? (iii) Whether the old rails purchased from the Railways can be clearly recognised as non -duty paid when the Central Board of Excise & Customs, New Delhi, had issued various Circulars that re -rollable maters used without undergoing the process of melting in the manufacture of goods falling under Chapter 72 or Chapter 73 are eligible for deemed credit at the rate of Rs. 9.20 per M.T? (iv) Whether the benefit of Notification No. 202/88 -C.E., dated 20 -5 -1988 can be denied when the rails purchased by the railways are admittedly rollable or re -rollable materials and by serial and by Serial No. 2A in the table annexed to the Notification No. 202/88 the rollable or re -rollable materials are specified as inputs in the manufacture of bars and rods of Iron or steel for the purpose of granting exemption to the said bars and rods and the final product manufacture by the applicant viz. M/s. round bars are specified as final products in the aforesaid Notification?
(2.) THE applicant is a manufacturer of 'MS round bars' manufactured from the old rails purchased from Railway through auction as raw material. The applicant claimed the benefit of Notification No. 202/88 -C.E,, dated 20 -5 -1988 in respect of their final product. The applicant had cleared their final product from the period October 1993 to February 1994. A show cause notice was issued to the applicant to show cause as to why the duty not paid on the removal of goods should not be demanded and recovered from them.
(3.) THE show cause notice was replied. The Adjudicating Authority vide its order dated 6 -10 -1994 confirmed the demand of duty. The adjudicating authority held that the applicant were not entitled for the benefit of exemption under notification dated 20 -5 -1988. An appeal was filed by the applicant which too was dismissed by the Collector (Appeals). The applicant thereafter filed an appeal before the Customs, Excise & Gold (Control) Appellate Tribunal. The Tribunal by following the ratio as law laid down by the Larger Bench of the Tribunal in the case of Machine Builders v. C.C.E. - : 1996 (83) E.L.T. 576 dismissed the appeal. The reference application was allowed by the High Court on 27 -2 -2003 and the four questions as noted above were referred for consideration by this Court.;