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TMI Blog1985 (11) TMI 180X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Collector were taken because he held that Atma Steel had removed cold rolled steel strips without payment of duty and had failed to enter quantities of cold-rolled steel strips in Central Excise records. 2. M/s. Atma Steel received hot-rolled strips and subjected them to cold rolling. The Central Excise said that this cold-rolled steel strips obtained from the hot-rolled steel strips are leviable to central excise duty under Central Excise Tariff Item 26AA(iii). This took place in 1981 then sub-item (iii) of Central Excise Tariff Item 26AA for Iron or steel products read steel strips was leviable to central excise duty under Central Excise Tariff Item 26AA(iii). This took place in 1981 when sub-item (iii) of Central Excise Tariff Ite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing 10 mm in thickness and of not less than 600 mm in width. Rs. 350/- per M.T. (b) Other cold-rolled strips Rs. 650/- per M.T. (c) Other hot-rolled strips Rs. 450/- per M.T. The said notification also granted certain further reduction in duty depending upon nature of raw material used, method of manufacture etc. in the situations mentioned in various provisos thereof. (III) Hot-rolled strips and cold-rolled strips are two different commodities known to the market in their use and value. (IV) It is the well-established practice to collect differential duty when "Other cold-rolled strips" are produced out of 'Other hot-rolled strips' on which basic duty at the appropriate effective rate has already been paid. This practice is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fication lists four kinds of strips under the head "Strips" (a) Galvanised strips (b) strips not below 5 mm but not above 10 mm thick and not less than 600 mm wide (c) other cold-rolled strip and finally (d) other hot-rolled strips. It escapes his notice that the notification categorises hot-rolled strip and cold-rolled strip under "6 Strips", meaning thereby that both are strips. This reason supports the factory more than it does the department's case; but whatever it does it is no basis for levying duty on this cold-rolled strip. 6. As for reason III, to be sure, hot-rolled strips is a different commodity from cold-rolled strip. But different though they are only the law decides dutiability, not the market. The law places all strips hot- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the "nature of commodity" doctrine, because it does not accord with the law; indeed it conflicts with it. There is recognition of this in today's central excise tariff - galvanised strips, hot-rolled strips and cold-rolled strips are in separate and distinct items or sub-items and so can be taxed separately; one duty, after another ,had been paid. What would the central excise do now when a duty paid strip is galvanised? A galvanised strip is not known as a different commodity for an ungalvanised strip, and galvanization does not change the strip into a new product. But the tariff lays down a duty separately for galvanised strip which means the law requires duty to be paid on the galvanized strip even if the strip from which it is produc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, all strips whether hot-rolled or cold-rolled are, for purposes of law, one commodity subject to duty under one head or sub-head. Exemptions providing one concession to hot-rolled strips and another to cold-rolled strips do not alter this fundamental basis. Once a strip has paid the "strip" duty under sub-item (iii) of Item 26AA it will never have to pay that duty again whatever shape or form it is changed into, as long as it remains in the same "strip" category of the tariff and no process and no alteration in its nature or name or any other thing can attract to it the duty of a strip That was the law at the relevant time; (it is no longer the law now). The action of the Collectorate to levy on the cold-rolled strip the duty under sub-it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cture' takes place and liability to duty is attracted". 13. The Tribunal decision on which Smt. Zutshi relied is Veekayam Industries v. Collector of Central Excise, Chandigarh - 1985 (21) E.L.T. 596 Tribunal. In this decision, it was held that Conversion of round bars into bright bars which as distincts name, character and use constituted manufacture. As far Smt. Zutshi's reliance on the two decisions of S.C., it is sufficient to say that after the process of cold rolling, steel strips have remained only steel strips, though hot rolled. There has thus been no change in use even though character and use may have changed. In view of this, the two decisions would not apply to the present case. The precise effect of the Supreme Court decision ..... X X X X Extracts X X X X X X X X Extracts X X X X
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