Sunflag Iron and Steel Co. Ltd. Vs. Commissioner of C. Ex., Nagpur - Court Judgment

Excerpt:
1. the application is for waiver of deposit of duty of rs. 26.79 lakhs.the applicant availed of the benefit of the exemption contained in notification 13/2000 exempting from duty freight and other charges which would otherwise be includable in the assessable value of the goods. exemption is available to goods of chapters 72 and 73 manufactured and cleared from an integrated steel plant. the integrated steel plant is defined in the explanation to the notification as meaning a manufacturer or producer, who manufactures the goods of chapters 72 or 73 or manufactures in the same premises.2. the duty has been demanded on the finding of the commissioner that the applicant is not an integrated steel plant for the reason that part of its manufacture of goods of chapters 72 and 73 was out of sponge iron which it purchased from outside.3. after hearing both sides, we are prima facie of the view that the applicant does not seize to be an integrated steel manufacturer because part of its final products were produced out of sponge iron that it cleared from outside. by this act, it cannot be said that it lost its identity of an integrated steel plant which it otherwise had. however, the question that would arise is whether the benefit of the exemption would be available to the goods that it produced, not as an integrated steel plant but otherwise i.e. whether the exemption would apply to goods that it manufactured out of the sponge iron that it bought.having regard to these aspects, we find it appropriate to ask the applicant to deposit rs. 12 lakhs out of the duty demanded within a month from the receipt of this order. upon which, we waive deposit of the remaining duty and stay its recovery.

Judgment:
1. The application is for waiver of deposit of duty of Rs. 26.79 lakhs.

The applicant availed of the benefit of the exemption contained in Notification 13/2000 exempting from duty freight and other charges which would otherwise be includable in the assessable value of the goods. Exemption is available to goods of Chapters 72 and 73 manufactured and cleared from an integrated steel plant. The integrated steel plant is defined in the explanation to the notification as meaning a manufacturer or producer, who manufactures the goods of Chapters 72 or 73 or manufactures in the same premises.

2. The duty has been demanded on the finding of the Commissioner that the applicant is not an integrated steel plant for the reason that part of its manufacture of goods of Chapters 72 and 73 was out of sponge iron which it purchased from outside.

3. After hearing both sides, we are prima facie of the view that the applicant does not seize to be an integrated steel manufacturer because part of its final products were produced out of sponge iron that it cleared from outside. By this act, it cannot be said that it lost its identity of an integrated steel plant which it otherwise had. However, the question that would arise is whether the benefit of the exemption would be available to the goods that it produced, not as an integrated steel plant but otherwise i.e. whether the exemption would apply to goods that it manufactured out of the sponge iron that it bought.

Having regard to these aspects, we find it appropriate to ask the applicant to deposit Rs. 12 lakhs out of the duty demanded within a month from the receipt of this order. Upon which, we waive deposit of the remaining duty and stay its recovery.