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The Salt Cess Act, 1953

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Bombay High Court
The Indian Standard Metal Co. Ltd. ... vs The Union Of India (Uoi) And Ors. on 20 January, 1994
Equivalent citations: 1994 (3) BomCR 392
Author: V Mohta
Bench: V Mohta, H Gokhale



JUDGMENT

 

V.A. Mohta, J.

1. Following entry in Exemption Notification No. 43/75 dated 1-3-1975, Exh. `B', issued under Rule 8(1) of the Central Excise Rules, 1944 falls for consideration in this writ petition.

  Sr.      Sub       Description Duty                 Conditions
No.      Item
         No.
2.       (a)       Aluminum in any crude               Nil     If manufactured from
                   from (including ingots,                     any of the following
                   bars, blocks, slabs,                        materials or a com-
                   billets, shots, pellets,                    bination thereof, 
                   and castings. namely :--
                       (a)    old aluminum
                              scrap;
                              or
                       (b)    waste or scrap obtain-
                              -ed from virgin metal
                              or virgin aluminium
                              in any crude form,
                              or a combination of 
                              both on which appro-
                              -apriate duty of
                              excise or the addi-
                              -tional duty leviable
                              under Section 2A of the 
                              Indian Tarrif Act, 1934
                              (32 of 1934), as the 
                              case may be, has
                              already been paid. 


 

By order dated 28-12-1981 passed by the Assistant Collector, exemption has been denied to the petitioners on the ground that the petitioners had used alloys like Silicon, Copper, Magnesium, Mangenese and Nickel in the Aluminium" and hence the product did not answer the description "Aluminium" as contemplated under tarrif Item 27. The Collector confirmed the order. Aggreived thereby the present petition is filed.

2. Two points arise : (i) whether addition of 20% alloys in the Aluminium takes the item out of the exemption Notification and (ii) whether other two conditions (a) and (b) in the Notification are satisfied. The answer to the first question is simple. Tariff Item No. 27 is Aluminium. Explanation II states that the expression "Aluminium" in this Item shall include any alloy in which Aluminium predominates by weight over each of the other metals. In the instant case, Aluminium is not less than 80% and other alloys are only 20%. Hence despite addition alloys like Silicon, Copper, Magnesium, mangenese and Nickel the product answers the description "Aluminium" as contemplated by the Item 27.

3. Additionally there is a circular dated 24-2-1982 issued by the Ministry of Finance clarifying that even if other metals are added as a technological necessity in combination with the base metals specified in the various Tariff Item including Item 27, the exemption would apply.

4. It appears that every one has concentrated on the meaning of the term "Aluminium" without paying appropriate attention to conditions (a) and/or (b) as a result no clear finding is reached on that aspect. On inquiry with Shri Bharucha, learned Counsel for the petitioners as to whether or not as a matter of fact these two conditions have been complied with, he answered in the positive. But there is no definite material on record. Under the circumstances, the only proper course to follow is to remand the matter to the Assistant Collector for fresh decision only on the question of compliance with the two conditions after giving appropriate hearing to the Petitioners.

5. Under the circumstances, the orders passed by the Assistant Collector as well as the Collector are quashed and set aside and the matter is remanded to the Assistant Collector for fresh decision as indicated above. Needless to repeat that the Assistant Collector shall proceed on the basis that the product is "Aluminium" as contemplated by the description in the exemption Notification.

6. Our attention is invited by Shri Sethna, learned Counsel for the Respondents, to section 11(d) of the Central Excise and Salt Act, 1944. We direct that if the duty is collected by the petitioners, they shall forthwith credit the same with the Central Government.

7. Rule absolute in the above terms. No order as to costs.

8. Certified copy expedited.

Rule made absolute.