TMI Blog1984 (4) TMI 309X X X X Extracts X X X X X X X X Extracts X X X X ..... eel ingots falling under item No. 26 of the First Schedule to the Act, from certain raw materials such as Ferro-Silicon, Ferro-Manganese, Silico Manganese Alloy, Ferro-Sulphur (H.C.), Ferro Chromium (L.C.), Ferro Molybdium, Ferro Titanium, Ferro Boron, Aluminum, Nickel, Sulphur, Dolomite, Flour- spar, Iron Ore, Lime Stone, Met Coke, Graph and Lime, without furnishing full details of such materials used in the manufacture of the said goods, while avai- ling of the partial and complete exemptions provided by the notifications refe- rred to earlier and clearing 2,19,098 MT of steel ingots during period 11-1-1977 to 19-11-1981 without payment of appropriate duty leviable and thereby evading payment of central excise duty to the extent of ₹ 5,79,99,205.410. 2. The notifications referred to above provided for a partial or a total exemption on steel ingots falling under item 26 when manufactured with the aid of electric furnace provided they are manufactured from any of the following materials namely- (a) Iron or steel melting scrap; (b) a combination of the materials referred to at (a) above with fresh unused steel melting scrap on which the appropriate duty of excise has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. Apart from the fact that the various raw materials mentioned earlier are not specified, quite a few of them like nickel, aluminum, chromium etc. are not necessary even for technological reasons but are raw materials used due to the specific requirements of the customers. He relied on AIR 1957 pages 639 to 640 and I.L.R. 41 Cal. 446-457 to support his finding that when there is a conflict between law and practice, the law must prevail. Had the Government intended to allow admixture like ferro-alloys, nickel and chromium with steel scrap, the notification would have been worded on the lines of notification 144/75, dated 7th June, 1975, as amended, wherein it is provided that alongwith the specified types of scrap the words in admixture with other materials , are mentioned. If the letter dated 28th May, 1971 of the Central Board of Excise and Customs that the exemption contained in notification No. 26/69, dated 1-3-1969, as amended, is to be allowed, irrespective of what is used in the furnace for obtaining the desired quality of steel, are to be accepted, then there was no necessity for the notification to list the specified raw materials from which only the steel ingots were req ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed, the period 11-1-1977 to 14-9-1979 was one when the use of various raw materials had not been brought to the notice of the department. From 15-7-1979 to 16-11-1980 rule 10 was fully operative because even the letter dated 15-7-1979 did not mention all the raw materials and was only a mention of the raw materials falling under item 68 on which duty was paid, so as to claim set-off or proforma credit. Regarding the Circular of the Central Board of Excise and Customs in April 1973 that it was an established practice to admix ferro-alloys and other fluxing materials in the manufacture of steel ingots on which exemption was claimed, the Collector held that if the duty is not paid or short paid in view of the clarification given by the department or due to incorrect interpretation of the notification, the officers are still empowered to recover the duty under rule 10 or section 11 and cannot be prevented from exercising their powers by applying the principle of equitable estoppel which is a rule in equity and cannot prevail against law. He cited four judgements in this context- 1. Etikoppaka Co-operative Agricultural Society Ltd. v. U.O.I. - 1979 E.L.T. (J 533) (A.P.) - 1979 Tax. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -1970 to provide for such admixture. However, demands were raised for the period 1-3-1969 to 4-4-1970 and consequent on Board s order 3/6/69-CX. 4, dated 28-5-1971 clarifying that notification 26/69 as amended by 120/69 does not preclude the use of fluxing materials like lime, lime stone, dolomite, flourspar as well as ferro alloys, ferro manganese, ferro silico etc. and iron ore up to 5%, the demands were withdrawn. In 1973 the matter was again examined and it was clarified in MSDR 137/1/72 CX. 4, dated 19-4-1973. It was clarified that notification No. 65/73 as well as the previous notification 207/72 does not preclude the use of small quantities of iron ore, ferro alloys and other fluxing materials in the manufacture of steel ingots with the aid of electric furnaces from 1973 to 1981, the classification lists were being approved. In each melt the log sheets show all the ingredients used in the manufacture of ingots. In the case of copper and copper alloys it was clarified by the Board s order of 24th February, 1982 that the use of tin, nickel, zincs etc. not mentioned in the exempting notification as raw materials would not disentitle the copper alloys manufactured provided the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. and Alloy Steels Plant should be using much higher percentage of ferro alloys and to the best of his knowledge are enjoying the concessional rate of excise duty. The National, Iron and Steel Co. and Orient Steel and Industries Ltd. who are within the same jurisdiction produced similar type of steel and the adjudication orders by the Collector of Central Excise, Calcutta confirmed this. The Government of India had authorised Mini Steel Arc Furnaces to produce alloy steel according to its policy laid down in Guidelines for Industries 1975-76. It is confirmed that since the impugned order of 10th February, 1983, no demand has been raised and the appellants are availing of the concessional rate on their steel ingots and in spite of the show cause notice dated 7th January, 1982 for the period upto 19th November, 1981, the department has allowed payment of excise duty at concessional rate on the end products after 7th January, 1982 which continued even after the said adjudication order was passed. 6. Shri Lakshmi Kumaran, defended the order under appeal. He referred to the word namely used in notification, and argued that it is specific in relation to raw materials. Only tho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ched the Collector. Added to this, in the same Collectorate there is an order dated 24-11-1982, passed by the Assistant Collector of Central Excise, which is diametrically opposite to the subject order of the Collector and no action was taken for reviewing this order or getting it set aside. It also appears that for later periods, without any change in the notification, in the same Collectorate the appellants have been getting concession under the notification. Besides, the appellants have urged that in similar circumstances other steel manufacturers like M/s. Durgapur Steel, Mahindra Steel Ltd. and others had been availing of the concession under the notification, even though they were using higher percentage of ferro-alloys. In particular, two of them-National Iron and Steel and Oriental Steel Industries Ltd. both within the jurisdiction of Calcutta Collectorate-had been availing of this concession, though they had also been using similar ingredients in their manufacture. It is therefore clear that denial of the concession to the Appellants was discriminatory. 9. While an authority acting quasi-judicially is certainly not bound by directions or circulars of other authorities, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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