Full Judgment
2. Considered. There is lot of force in the arguments of the Ld. DR.The appellants have sought to equate "virgin aluminium" with "aluminium in crude form". This is not correct. As seen from the Notification itself Sl. No. 2 of the said exemption Notification which is the relevant entry speaks of "virgin metal or, virgin aluminium in any crude form". Further, the entry 4 of the said Notification speaks of "aluminium in any crude form". This would show that the "virgin" and "crude form" are two different things. The appellant's argument would equate "virgin metal" with "unwrought metal". The ingots whether alloy or unalloyed, can be regarded as metal in crude form or in unwrought form but they would not necessarily be "virgin" unless these are made directly from ore as per the IS. definition. In the instant case the I.S. definition is not merely by way of quality control but distinguishes "virgin" metal from secondary metal. On this view of the matter the department's appeal is allowed and the cross objection is rejected. Ordered accordingly.
3. I have gone through the order prepared by my learned brother Shri S.D. Mohile, Member (T) but I could not persuade myself to agree with the same, hence I am recording my separate order.
4. The assessees are manufacturing Aluminium Castings out of ingots of Aluminium Base Alloy. The department's contention is that they are not manufacturing their goods from waste and scrap and hence the benefit of the notification in question is not available to them. The assessee's contention has been that while manufacturing the aluminium casting falling under TI. 27(a)(ii) from aluminium ingots falling under 27(a)(i), the Central Excise Duty has already been paid on aluminium ingot and such ingots are in crude form. They have pleaded that the metal aluminium is never obtained in 100% purity and it is mixed with other metals. Therefore, aluminium ingot even if mixed with certain quality of other metals continues to be aluminium ingot and it is also a virgin aluminium. Virgin aluminium means that aluminium ingot which has not been used earlier. They state that the aluminium ingots were in virgin form only as it had been obtained straight from melting process and it had not undergone any other process or processes.
5. The ld. Asst. Collector did not agree with their contention.
Negativing the ld. Asstt. Collector's order, ld. Collector (Appeals) has held on this point as follows : "I further find from the findings of the Asstt. Collector that the crucial point before him was that whether the word 'virgin aluminium' covers the ingots used by them in the manufacture of castings or not. The appellants have contended that the distinction made by the Asstt. Collector between primary manufacturers and secondary manufacturers is uncalled for and that the castings are made from 'virgin aluminium in crude form' and aluminium ingots are 'virgin aluminium in crude form and as such the exemption Notification No.43/75-CE dt. 1-3-1975 is applicable in their case. I agree with the contention of the appellants. The conditions laid down in the corresponding entries in column No. (5) of the table annexed to the notification at Sr. No. 2 are as under: "Sr. No. 2(a) - Description of goods :- aluminium in any crude form (including ingots, bars, blocks, slabs, billets, shots) and casting are assessed to nil rate of duty, if manufactured from any of the following materials or a combination thereof, namely - (a) old aluminium scrap or (b) waste or scrap obtained from virgin metal, or virgin aluminium in any crude form, or a combination of both on which appropriate duty of excise or the additional duty leviable under Section 2A of the Indian Tariff Act, 1934 (32 of 1934) as the case may be, has already been paid".
"In this term the expression 'aluminium' shall include any alloy in which aluminium predominates by weight over each of the other metals".
In view of the foregoing the Ingots are nothing but the virgin aluminium in any crude form and if castings are manufactured from such virgin aluminium in any crude form it is exempted in terms of proviso (b) at Sr. No. 2(a) of the table annexed to the Notification No. 43/75, dt. 1-3-1975. The appellants are, therefore, entitled for exemption under the said notification for the products aluminium castings falling under T.I. 27(a)(ii).
In view of the above observations, I set aside the impugned orders of the Asstt. Collector and allow the appeal with consequential relief, if any".
The Explanation II of Tariff item 27 makes it clear that "aluminium" shall "include any alloy in which aluminium predominates by weight over each of the other metals". The ld. Collector (Appeals) has relied on this explanation and has rightly held that aluminium ingots are virgin aluminium in any crude form. The ld. Counsel for the assessee referred to the definition of the term 'virgin' from Oxford Dictionary to mean "undefiled, spotless, not yet used or tried" and argued that aluminium ingots had not been put to any other process or transformed into any other form before it is used for the manufacture of aluminium castings and hence it qualified for exemption. I see lot of force in this argument and I accept the same, as also because, Aluminium is never available in 100% purity and the explanation to tariff itself has clarified that if the Aluminium content predominates from other metal contents then it continues to be aluminium. There is no dispute in this case on this point. As the ingots are in crude form, they are also virgin and hence they are entitled to the benefit of the notification.
The Id. Counsel has relied on certain rulings to draw an analogy. I do not see these rulings having any direct bearing on the notification. In any case I do not see any merit in this appeal and hence I direct the appeal to be dismissed.