9911796707
Advanced Search 
TMI Blog1995 (5) TMI 101X X X X Extracts X X X X X X X X Extracts X X X X ..... p generated during the manufacture of iron & steel products, was not classified by them in the classification list. The department had noticed that they had manufactured `flats' out of duty paid steel ingots & semi-finished as well as combination of semi-finished steel and re-rollable scrap and had cleared 1307.220 M.T. of flats produced out of steel combination of semi-finished steel or re-rollable scrap and availed set-off of Rs. 4,31,514.60 during the period from Feb., 1983 to July, 1983 @ Rs. 330/- per M.T. on the clearances as per Notification No. 55/80, dated 13-5-1980. Further, it was noticed that they had cleared the scrap obtained in the manufacture of Iron & Steel products during the period Sept., 1982 to July, 1983 to the tune of 119.750 M.T. without paying duty on it and availing the set-off on the products during the manufacture of which such scrap was generated. Therefore, a show-cause notice dated 9-12-1983 was issued by the Superintendent of Central Excise, Philips India Range asking the assessee to show-cause as to why the amount of set-off availed by them on the clearances of Iron & Steel products should not be recovered from them. A demand of duty on 119.750 M.T. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey cited out Supreme Court judgment in case of Union of India & Others v. Iron & Steel Co. Ltd., Jamshedpur. 9. As per Notification No. 154/77, dated 18-6-1977, re-rollable scrap has to bear the duty of Rs. 330/- per M.T. and the scrap they used was duty paid, and as per Notification No. 75/67, dated 20-5-1967. They were entitled to set-off of the duty on products if they are made from duty paid goods. 10. As per the Act, the demand has to be issued within six months from the date of payment of duty and as such the demand notice issued is time barred. In case of show-cause notice demanding duty of Rs. 39,517.50 on the scrap, they replied on 12-1-1984 and raised the following points : 1. The scrap that was cleared from their factory was only cut ends of bars and angles and not scrap as such. 2. They manufacture Bars and Angles in their factory from duty paid material and enjoy exemption under Notification No. 206/63, dated 30-11-1963. During the process of manufacture i.e. cutting of Bars and Angles, the cut ends of bars and angles remain and they are not marketable as such. 3. In view of their identification with the Bars and Angles, the cut ends cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts', as also because no separate account for raw material in Form IV had been maintained in respect of flats manufactured out of semi-finished steel and steel ingots and that with the combination of re-rollable scrap. He has also rejected the plea for the benefit of the Notification No. 152/77, as scrap in the form of Bars & Angles is not marketable as such being shorter in length, and that they are not known in the trade as `Bars & Angles', but known only as scrap and it has also not been classified as scrap in the classification list. He has held that there is a mis-statement and hence larger period under Section 11A can be invoked and duty confirmed for the extended period. 4. The ld. Collector (Appeals) held that the demands cannot be confirmed for the extended period and hence he directed the Assistant Collector to readjudicate the case for demands falling within the period of six months. He has confirmed the findings pertaining to the non-availability of the benefit of the relevant notifications. The ld. Collector confirmed the demand of Rs. 39,517.50 under Section 11A passed by Assistant Collector. 5. We have heard Shri P.S. Bedi for the appellant and Shri A.K. Singha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso submitted that there was no mis-statement and the department had approved the CL's from time to time and hence the demand for extended period confirmed in respect of second demand is unsustainable. 7. Ld. JDR submitted that the Govt. policy cannot be taken into consideration, while interpreting the notification. The end cuts used in the manufacture of `flats' were not entitled to the benefit and hence the denial of benefit is justified. Even the notification does not specify the use of inputs in combination. The Notification No. 54/64, dated 1-3-1964 is not available to waste scrap used in the manufacture of `flats' and hence duty of Rs. 39,517.50 confirmed for larger period is justified. The party had also not filed classification list. The party had admitted that they had used bars and angles and not waste and scrap and hence the duty confirmed is justified. In reply, ld. Advocate submitted that the department's understanding of the term `in combination' has not been elucidated in the orders and hence the finding given by the lower authorities is unsustainable. 8. We have carefully considered the submissions made by both the sides and have perused the record. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication S. No. 4 flats with specifications as indicated in (a) to (c) are granted the benefit of reduced rate on the conditions that : (i) where products made from steel ingots, falling under Item No. 26 are cleared prior to the 18-6-1977, on payment of duty, at the appropriate rate, the duty specified in the corresponding entries in column (3) of the table shall be reduced by [two] hundred rupees per metric tonne. (ii) where products are made from semi-finished steel on which duty at appropriate rate has already been paid or from steel ingots falling under Item No. 26 of the aforesaid schedule which are cleared from the factory on or after 18-6-1977, on payment of duty, the duty specified in column (3) of the table is reduced by Rupees three hundred and thirty per M.T. (iii) provided also where the duty paid on steel ingots or semi-finished steel, as the case may be, used in the manufacture of any quantity of the products mentioned in the table is in excess of the duty leviable on such products, the amount eligible for adjustment towards the exemption shall be restricted to the amount of duty leviable on the quantity of the said products. (iv) The remaining ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 164/78-C.E., dated 9-9-1978 exempts scrap iron & steel melting scrap falling under Item Nos. 25 & 26 respectively and obtained in the manufacture of iron & steel products from Iron in any crude form, or steel ingots, or iron or steel products, which have already paid the appropriate amount of duty of excise leviable under Item Nos. 25, 26 or 26AA of the said Schedule or the additional duty leviable under Section 3 of the Customs Tariff Act, 1975, as the case may be, from the payment of the whole of duty leviable thereon, provided no set-off of duty has already been availed. Board's Tariff Advice No. 16/81, dated 6-2-1981 - ECR 1981/105B states : clarified that cut-ends of M.S. Round Bars, which can be re-rolled as such, would be treated as Bars and assessed to day under Tariff Item 26AA - CET, and where the cut-ends of the M.S. Round Bars, cannot be re-rolled as such, these would be regarded as melting scrap for assessment under Item No. 26-CET but would be entitled for exemption under Notification No. 56/64-C.E., dated 1-3-1964. In the budget speech of 1977-78, the Hon'ble Finance Minister has stated : "Most steel re-rollers produce bars, rods, angles, etc., which attract ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otification does not bar use of steel ingots, semi-finished steel in combination or with re-rollable scrap. We also notice that Notification No. 77/72 clearly exempts Iron or Steel products manufactured from old or re-rollable scrap without undergoing the process of melting or from fresh unused re-rollable scrap. This notification has clear applicability. Therefore, the interpretation placed by us for the term "steel ingot" is in keeping with the clear exemption granted under Notification No. 77/72 and in keeping with the understanding placed by Board and the intention of Govt. as expressed through the budget speech of Finance Minister. As regards the second point, the Board Circular (supra) clarifies that the cut-ends of Bars and rods are melting scrap and held classifiable under Tariff Item 26A-CET and exempted under Notification No. 56/64 dated 1-3-1964. A simple reading of Notification No. 56/64 is also clear that the product is exempted from payment of duty. Hence, the duty confirmed on scrap generated is not justified. 10. In the result, the appellant succeeds in this appeal and the appeal is allowed. 11. [Assent per : P.K. Kapoor, Member (T)]. - I agree with the fin ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
