1986 (5) TMI 137 - AT - Central Excise

Summary

Issues:
- Interpretation of notification regarding the exemption of duty on steel ingots and its applicability to runners and risers.
- Determination of whether runners and risers can be classified as steel ingots for the purpose of duty exemption.

Analysis:
1. The case involved an appeal by the Collectors of Central Excise, Chandigarh and Jabalpur against the order of the Collector of Central Excise (Appeals), New Delhi. The issue revolved around the clearance of runners and risers by the respondents without payment of duty or at a concession rate of duty under specific notifications. The Department contended that the benefit of the notification was only for steel ingots and not for runners and risers, which were considered steel melting scrap. Show cause notices were issued, alleging contravention of various provisions and demanding duty. The respondents argued that runners and risers should be treated as ingots, citing industry understanding and past practices. They also referred to a Government of India decision supporting their interpretation.

2. The Appellate Collector allowed the appeals of the appellant based on the Government of India decision. However, the Collector of Central Excise (Appeals) challenged this decision on the grounds that the exemption notification applied only to steel ingots and not to runners and risers. The Department argued that the term "steel ingots" did not extend to runners and risers, which were distinct commodities. They referred to a previous Tribunal decision that supported this interpretation and emphasized that the end use of steel ingots was irrelevant.

3. The respondents contended that runners and risers should be considered ingots as they represented the first stage of solidification for further hot treatment. They pointed to trade notices and government instructions to support their position. The issue of limitation in raising the duty demand was also raised. The definition of steel ingots in the notification and the main tariff entry was a key point of contention between the parties.

4. The Tribunal analyzed whether runners and risers could be classified as steel ingots. It was noted that the term "steel ingots" was not defined in the Tariff, and reliance was placed on the ISI definition. The Tribunal examined the characteristics of ingots, including their shape, size, and intended use for subsequent hot working. Evidence presented in court showed that runners and risers did not meet the criteria of ingots and were more akin to melting scrap. The Tribunal upheld the decision in a previous case involving a similar issue and concluded that the benefit of the notification did not extend to runners and risers. The case was remanded for further consideration on other points raised by the respondents, including the question of time bar.

5. In conclusion, the Tribunal held that runners and risers could not be classified as steel ingots based on the evidence presented. The Tribunal emphasized the need for a correct interpretation of the term "ingot" in the relevant notification and rejected the application of promissory estoppel or past government decisions to alter this interpretation. The case was remanded for a fresh assessment by the Collector (Appeals) on other issues raised by the respondents.