ORDER
V.K. Jain, Member (T)
1. The instant two appeals filed by the Revenue against the Order-in-Appeal No. 63-63/Cal-IV/2002 dated 23.10.2002 passed by Commissioner of Central Excise (Appeals), Kolkata. The facts of the case are that M/s. Hindustan National Glass & Industries Ltd. were found to have manufactured Unmachined C.I. Castings and Unmachined Cast Articles of iron which were cleared either internally or outside without payment of duty, by classifying them under SH. No. 7325.10 of CETA. The Revenue approved the classification and allowed exemption under Notification No. 275/88-CE. The said unmachined products were further machined within the factory to make Machined Moulds for Glass falling under SH. No. 8480.00. The finished Moulds were also used within the factory without payment of duty by virtue of Notification No. 220/96-CE dated 2.4.1986. The Mould Scraps arising for used Moulds were used as inputs without payment of duty in manufacture of fresh Unmachined Castings (Iron) and Unmachined Cast Articles of Iron, which were again cleared without payment of duty under Notification No. 275/88. It was held by the original adjudicating authority that Unmachined products were never produced out of the specified duty-paid inputs alone, since such goods contained non-duty paid Mould Scrap also. Therefore, exemption from Notification No. 275/88-CE, was not available to the assessee. The Commissioner (Appeals) allowed the appeals before him with consequential reliefs. The Revenue’s appeals had been filed against the Order of the Commissioner (Appeals). The respondents claimed exemption under Notification No. 275/88-CE dated 4.11.1988 in which it was stated, among other conditions, that the inputs would have to be duty-paid. The assessee brought the duty-paid inputs and mixed them with internally generated scrap.
2. The main point in these two appeals is whether the internally degenerated scrap arising out of the exempted secondery stage i.e. the final product, is duty-paid otherwise. The Revenue has submitted that when duty has not been paid on it by the assessee, it cannot be said as duty-paid.
3. We have heard Shri N.K. Mishra, learned JDR for the Revenue. He has reiterated the points raised in the Appeals filed by the Commissioner. On the other hand, Shri J.P. Khaitan, learned Advocate along with Shri Partha Banerjee, learned Advocate submitted on behalf of the assessee (Respondent company) that the Order of the Commissioner (Appeals) is perfectly legal. The Commissioner (Appeals) has placed reliance on a judgment of the Tribunal (being the Order No. A-1091/CAL/2000 dated 25.7.2000) in the case of Bihar Alloy Steels Ltd. v. Commissioner of Central Excise, Patna. In the said case, exemption has been claimed, vide Notification Nos. 152/77-CE, 159/79-CE and 54/80-CE, on steel ingots and in the process of manufacture, internally generated scrap commercially known as “Circulating Scrap”, has been used. The Tribunal has extended the benefit of exemption on the ground that the goods have been manufactured from the specified inputs and “Circulating Scrap” has also originated from the specified inputs. In the instant case, the Commissioner (Appeals) has held that the goods in question i.e. the Melting Scrap also originated from specified inputs i.e. Pig Iron via Unmachined Cast Articles via Moulds. Thus, use of Mould Scrap along with specified input, Pig Iron, cannot disentitle the assessee from availing the benefit of exemption under Notification No. 275/88. The Tribunal’s above Order dated 25.7.2000 also referred to the Supreme Court’s judgment in the case of Union of India v. Tata Iron & Steel Co. Ltd. . In the said judgement, the Hon’ble Supreme Court has held that where the duty-paid pig iron is mixed with non-duty-paid pig iron, the set-off cannot be reduced on the ground that non-duty-paid material has also been used in the Notification No. 275/88-CE. There is no stipulation that Unmachined Cast Articles should be manufactured ‘only’, ‘exclusively’, ‘entirely’ out of the specified inputs. We find that the Order of the Commissioner (Appeals) is based on the Supreme Court’s judgment and this Tribunal’s decision referred to above.
4. In view of the above, we uphold the Order of the Commissioner (Appeals) and reject the appeals filed by the Revenue. Miscellaneous Application (COD) No. 131/03 also stands disposed of. The C.O.Ds. for Cross objections and the Cross Objections filed by the assessee also stand disposed of.