1990 (12) TMI 204 - AT - Central Excise

Summary

Issues:
Central Excise duty on iron used in the manufacture of Steel Melting Scrap, applicability of Notification No. 150/77, extended period of limitation, duty liability at the time of clearance to Mini Steel Plants, suppression of facts, duty liability on iron in crude form used in the production of steel melting scrap.

Analysis:
The appellant, engaged in manufacturing Pig Iron, Steel Ingots, and Iron & Steel products, had been following the "later the better" principle for Central Excise duty payment. The issue arose regarding the duty liability on iron used in the manufacture of Steel Melting Scrap, cleared under Notification No. 150/77. The show-cause notices sought to recover duty on iron used in the production of Steel Melting Scrap. The appellant contended that duty was not payable at the iron stage due to the principle accepted by the Government and clearances were made with the approval of the Central Excise Superintendent.

The Collector of Central Excise confirmed the demand, alleging contravention of Central Excise Law with an intent to evade duty payment. The Collector held that Notification No. 150/77 did not apply, and duty on iron used in the production of Steel Melting Scrap was payable at the time of clearance to Mini Steel Plants. The appellant challenged this decision.

The Appellate Tribunal found that the extended period of limitation could not be invoked as there was no suppression of facts by the appellant. The demand, if upheld, was limited to a period of 6 months before the show-cause notice. On the merits, the Tribunal held that duty on iron in crude form, when used in the production of steel melting scrap, was leviable at the time of dispatch of such scrap. The duty liability arose due to non-compliance with Notification 18/71 and Notification 150/77, as the steel melting scrap was cleared without payment of duty or following the prescribed procedure.

Ultimately, the Tribunal upheld the demand for duty for the 6 months preceding the show-cause notice issuance and dismissed the appeal with this modification. The decision clarified the duty liability on iron used in the production of steel melting scrap and emphasized compliance with the relevant notifications for duty exemption.