TMI Blog1999 (4) TMI 186X X X X Extracts X X X X X X X X Extracts X X X X ..... 3A of the Central Excise Act, 1944 in this case would commence from 1-9-1997, the production pattern of non-alloy steel ingots from April, 1997 to Aug., 1997 as well as in the preceding years would be relevant for determining the issue in question. In 1994-95, 1995-96 and 1996-97 the ratio of production of the steel castings and non-alloy steel ingots is 1 : 0.86, 1 : 0.81 and 1 : 0.55 respectively. This production pattern does not support the contention of the assessee that the production of non-alloy ingot steel was only incidental. The production figures of April, 1997 to Aug, 1997 also do not lend any support to the assessee s contention. The assessee is relying on the production figures of Sept., 1997 onwards to prove its point. These ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n-alloy steel ingots. They are using a induction furnace. The production capacity of the induction furnace according to the invoice dated 26-5-1984 is 1,000 kgs. A dispute arose on account of the claim of the assessee that they were mainly producing castings and incidentally manufacturing non-alloy steel ingots and as such were excluded from the ambit of Section 3A of the Central Excise Act, 1944 by virtue of explanation clause of Rule 96ZO(3). The Department scrutinised the production figures of the assessee for the year 1996-97 which revealed that the assessee/appellant had manufactured ingots to the tune of 40% of their total production and alleged that in view of the fact that 40% of the production could not be the incidental production ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to notice while taking the production figures of the preceding three years. He submitted that since the production of MS Ingots was less than 10%, the capacity of production of MS Ingots is incidental and the explanation under Rule 96ZO(3) stipulates that where steel castings and products of stainless steel are ordinarily produced, and MS Ingots are incidentally produced, sub-rule 3 of Rule 96ZO will not apply. He submitted that thus the provision of Section 3A of the Rules made thereunder would not apply in their case. Ld. Counsel submitted that the appellant is entitled to Modvat credit and that duty of excise had been correctly paid on the ingots under Section 3 at 15% after availing the Modvat credit. Ld. Counsel also submitted that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which has rightly been done by the ld. Commissioner. He, therefore, prayed that the impugned order may be upheld and the appeal may be rejected. 5. On a careful consideration of the submissions made and on perusal of explanation under Rule 96ZO(3), we find that the emphasis is on normal production of the induction furnace and incidental production, we will have to examine as to what incidental production means we note that incidental in Oxford Dictionary has been defined as Occurring as something casual or of secondary importance; not directly relevant to etc..... . Further the Hon ble Calcutta High Court in the case of Hukamchand Jute Mills (AIR 1958 Cal. 68) held that a thing is said to be incidental to another when it pertains to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n that the induction furnace was being used for production of MS Ingots of substantial quantity in comparison to the production of steel castings or stainless steel products. On examination of the issue, we find that the period in dispute is from Sept., 1997 to March, 1998. This is a period which is relevant for purpose of determination of the goods produced ordinarily or goods produced incidentally. We note that in the month of Sept., 1997 against the total production of 62.440, the production of non-alloy steel ingots was 11.325 mts. For the month of Oct., 1997 as against the total production of 64.215 m.ts., the production of non-alloy steel ingots was 7.430. In the month of Nov., 1997 against the total production of 61.600 m.ts., the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
