2005 (2) TMI 117 - SC - Central Excise

Steel Plant - Exemption - whether the Respondents (herein) are entitled to the benefit of Notification No. 30/97-C.E., dated 1st August, 1997 - Tribunal allowed benefit - Held that - The Notification has to be interpreted on its wording. No words, not used in the Notification, can be added. To accept submission of Appellants one would have to read into the Notification words to the effect that 100% of the manufacture or production of ingots or billets or rolled products must be from products manufactured or produced within the same premises. No such words appear in the Notification. If the intention was to restrict benefit to only those plants in which the entire production, from iron ore stage to ingots, was to be in the same premises the Notification would have so specified. The Notification does not even provide that if any item is purchased from outside then the benefit would be lost. In the absence of any such restrictions it must be held that the Notification merely requires that all the four conditions be fulfilled. If all four conditions are fulfilled, their benefit cannot be denied on the ground that certain percentage of production is from material purchased from outside. As in this case all four conditions are fulfilled, in our view, the Tribunal was right in holding that the benefit of the Notification was available - Decided against Revenue.

Summary

Issues:
Interpretation of Notification No. 30/97-C.E., dated 1st August, 1997 regarding the benefit entitlement for manufacturing ingots and billets of non-alloy steel.

Analysis:
The case involved a dispute over whether the Respondents were entitled to the benefit of Notification No. 30/97-C.E., dated 1st August, 1997, which specified the levy of excise duty on certain goods. The Respondents had a manufacturing unit capable of producing ingots or billets starting from the stage of iron ore within the same premises. However, a significant portion of their production was from sponge iron purchased externally. The issue was whether this fact would disqualify them from the benefit of the Notification. The Tribunal held that the Notification did not mandate 100% internal production and that the majority of sponge iron being purchased externally did not negate the benefit.

The Supreme Court analyzed the conditions specified in clause (e) of the Notification to determine the eligibility criteria for the benefit. The Court outlined four conditions that must be fulfilled: the Assessee must be an integrated steel plant, must manufacture ingots or billets starting from iron ore within the same premises. The Court noted that at least 4% of the Respondents' annual production met all four conditions. The Revenue contended that the benefit was lost due to the majority of production being from externally purchased sponge iron. However, the Court emphasized that the Notification should be interpreted based on its wording without adding additional conditions not explicitly stated.

The Court concluded that the Notification did not require 100% internal production and that as long as all four specified conditions were met, the benefit could not be denied. Since the Respondents fulfilled all conditions, the Court upheld the Tribunal's decision that the benefit of the Notification was available to them. Consequently, the Civil Appeal was dismissed, and no costs were awarded.