1998 (4) TMI 297 - AT - Central Excise

Summary

Issues: Duty demand confirmation, Reduced rate of duty application, Interpretation of Tariff description, Time bar contention

Duty Demand Confirmation:
The appeal was filed against the duty demand confirmed by the Additional Collector of Customs and Central Excise. The appellants were alleged to have cleared runners and risers applying a reduced rate of duty under Notification No. 53/80-C.E., dated 13-5-1980, which was contended to be applicable only to steel ingots specifically mentioned in the notification. The appellants argued that runners and risers emerged during the manufacture of steel ingots and thus, the reduced duty rate was rightfully availed. The consultant highlighted the differential in duty rates for steel ingots manufactured by ore-based and scrap-based manufacturers to support their claim. Reference was made to the Tariff description and technical literature to argue that runners and risers fell under the broader category of 'melting scrap' and were eligible for the exemption under the notification.

Reduced Rate of Duty Application:
The appellants' consultant contended that runners and risers should be considered as ingots based on technical literature and common trade parlance. He argued that any metal casting suitable for subsequent hot working could be classified as ingots, especially since the term 'ingots' was not clearly defined in the Tariff before 1983. The consultant emphasized that the appellants' belief regarding the classification of runners and risers was bona fide and correct, and there was no misrepresentation or suppression on their part justifying the duty demand beyond six months from the date of the Show Cause Notice (SCN).

Interpretation of Tariff Description:
The argument revolved around the interpretation of the term 'ingots' and whether runners and risers could be considered as falling within this category based on the technical literature available at the relevant time. The consultant referred to publications describing the process of manufacturing steel ingots to support the contention that runners and risers should be treated as ingots subject to the same duty rate applicable to ingots.

Time Bar Contention:
Regarding the time bar issue, the Additional Collector had rejected the appellants' plea on the grounds of non-disclosure of runners and risers in the Classification List for claiming the reduced duty rate under Notification No. 53/80. However, the Tribunal found merit in the consultant's argument that the appellants had reason to believe that runners and risers could be assumed to be ingots due to the lack of a clear tariff definition at that time. As the appeal was allowed on the time bar issue, the Tribunal did not address other points raised during the submissions.

In conclusion, the Tribunal set aside the impugned order and allowed the appeal based on the time bar contention, emphasizing the appellants' bona fide belief regarding the classification of runners and risers as ingots and the absence of deliberate intent to evade duty payment.