1986 (11) TMI 282 - AT - Central Excise

Summary

Issues:
1. Revision application against the order of the Appellate Collector for RT-12 assessment.
2. Classification of 'troughs' used in the manufacture of steel ingots.
3. Applicability of Notifications 75/67 and 17/71.
4. Show cause notice requirement for DD 2 demand.
5. Burden of proof on Department for classification.
6. Interpretation of the material used for troughs as steel melting scrap or strips.

Analysis:

1. The appellants filed a revision application against the Appellate Collector's order for RT-12 assessment. The appeal encompassed 17 matters, leading to supplementary appeals due to procedural changes, which were allowed after applications for condonation of delay.

2. The main issue revolved around the classification of 'troughs' used in manufacturing steel ingots. The Department contended that the troughs were assessable to excise duty as strips, while the appellants argued they were made from rejected cold rolled materials and should be considered as steel melting scrap.

3. The appellants relied on Notifications 75/67 and 17/71 for duty set-off and classification purposes. Notification 75/67 was pivotal in determining the classification of the troughs, while Notification 17/71 was invoked for iron and steel products manufactured from duty-paid ingots.

4. The requirement of a show cause notice for the DD 2 demand was debated, with the Department citing precedents to argue that no formal notice was necessary for classification under RT-12 returns.

5. The burden of proof for classification lay with the Department, and the Tribunal found no acceptable evidence to support the classification of troughs as strips. The appellants demonstrated that the troughs were made from rejected cold rolled materials and scrap, not strips.

6. The interpretation of the material used for troughs as steel melting scrap or strips was crucial. The Tribunal, based on previous decisions, concluded that the troughs were indeed made from scrap and merged with the ingots, warranting classification as steel melting scrap, not strips.

7. The Tribunal ultimately allowed the appeals, rejecting the Department's classification and upholding the appellants' argument that the troughs were made from scrap materials. The judgment emphasized the lack of evidence supporting the Department's classification and the adherence to the 'Later the better principle' for duty payment on final products.