2001 (1) TMI 394 - AT - Central Excise

Summary

Issues:
1. Confirmation of duty on cold rolled strips.
2. Demand of duty on the amount shown in the diary.
3. Demand of duty on outstanding balance.
4. Applicability of duty on cold rolled strips converted from hot rolled strips.

Confirmation of duty on cold rolled strips:
The appellants filed appeals against the confirmation of duty on cold rolled strips due to a discrepancy in the quantity cleared on payment of duty and recorded in the diary. The duty amount confirmed was Rs. 37,59,775.00. Additionally, a demand of Rs. 9,07,081.00 was made based on the diary entries, despite the appellants' claim that all amounts were received by cheque and duly recorded. Another demand of Rs. 6,31,742.00 was raised on the assumption that duty was chargeable on an outstanding balance of Rs. 45,68,791.00, implying sales made without duty payment in the past.

Demand of duty on cold rolled strips converted from hot rolled strips:
The appellants, engaged in converting hot wire strips into cold rolled strips and trading activities, were registered under Rule 174 of the Central Excise Rules. They procured hot rolled strips from various manufacturers and availed duty credit under the Modvat scheme. The appellants contended that the conversion of hot rolled strips into cold rolled strips constituted manufacturing, thus justifying the duty payment on cold rolled strips.

Applicability of duty on cold rolled strips converted from hot rolled strips:
The consultant for the appellants cited a Supreme Court ruling stating that cold rolled steel strips produced from duty-paid hot rolled strips did not undergo a manufacturing process and were not liable for duty. He further referred to a Tribunal decision supporting this stance under the new Tariff Act. The consultant argued that duty should not be payable on cold rolled strips if duty had already been paid on hot rolled strips. The Revenue, however, argued that the appellants continued to pay duty on cold rolled strips despite the legal position. The Tribunal, considering the legal precedents, held that no duty was payable on cold rolled strips converted from hot rolled strips if duty had already been paid on the latter, thus disposing of the appeals accordingly and allowing any consequential relief as per the law.