1995 (1) TMI 228 - AT - Central Excise

Summary

Issues:
1. Classification of end cuttings as steel melting scrap or a product.
2. Applicability of duty on end cuttings under Item 26 or 26AA.
3. Availability of refund for excess duty paid.
4. Proper discharge of duty responsibilities by the appellants.
5. Interpretation of Tariff Advice No. 16/81.
6. Use of RG-23 account for duty payment on finished products or scrap.
7. Availability of extended period for Department to demand duty.

Analysis:
The appeal concerns the classification of end cuttings from a rolling mill as either steel melting scrap or a product. The Board's Tariff Advice clarified that re-rollable end cuttings fall under Item 26AA, while those unsuitable for re-rolling are considered melting scrap under Item 26. The Department argued that the end cuttings were scrap, subject to duty under Item 26. However, the appellants contended that they paid duty as a product under Item 26AA and sought a refund for excess duty paid.

The appellants sold the end cuttings to electric furnace units, indicating their use as melting scrap. The Tribunal noted that the RG-23 account was meant for finished product duty, not scrap duty. Despite the appellants' awareness of the manufacturing process and permission to avail proforma credit, they were responsible for correct duty payment. The Department claimed an extended period for demanding duty due to this discrepancy.

The Tribunal reviewed the Tariff Advice and determined that the end cuttings' classification depended on their re-rollability. As the end cuttings were sold for melting, they were rightly considered melting scrap. Notably, the Department's mistaken payment through RG-23 instead of PLA did not constitute deliberate duty evasion. The Tribunal set aside the impugned order, acknowledging the appellants' mistaken payment and the absence of double duty payment.

In conclusion, the Tribunal accepted the appeal, emphasizing the importance of correctly classifying end cuttings based on their re-rollability and their actual use as melting scrap. The decision highlighted the significance of proper duty payment procedures and the inapplicability of an extended period for demanding duty in cases of mistaken payments.