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TMI Blog1992 (9) TMI 227X X X X Extracts X X X X X X X X Extracts X X X X ..... and without following Central Excise formalities. On an enquiry, partner of the appellant firm informed that they were purchasing hot rolled strips of 10 guage from the market and subjecting it to rolling in rolling machines after washing and pickling with sulphuric add. In this process the thickness of the strips was reduced to 13 guage. The cold rolled strips so produced by the appellants were cleared to other units for the manufacture of cycle parts. 1.2 The preventive officers found that such strips of 13 guage weighing 1990 Kgs. valued at Rs. 11,000/- were available in the factory. They were seized by the officers since they were believed to be liable to confiscation. 1.3 The appellants vide their letters 4-12-1984 and 5-12-1984 fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision in the cases of - (1) Atma Steel Private Ltd. v. CCE Chandigarh [1988 (36) E.L.T. 129 (Tribunal)] and (2) Steel Strips Ltd. v. C.C.E. [1988 (38) E.L.T. 507 (Tribunal)] In both these decisions it has been held that cold rolled strips manufactured out of duty paid hot rolled strips are not liable to pay duty again. Relevant Para 9 from the judgment of Tribunal in the case of Atma Steel is reproduced below:- "9. The tariff classes all strips in one category. Therefore, 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 stri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dgments of the Tribunal in Atma Steel and Steel Strips, as mentioned supra which are against the Revenue has submitted that those judgments do not lay down the correct law because in the market the two products, namely hot rolled strips and cold rolled strips are known separately and therefore, they are to be treated as different goods. Tariff Heading levies duty on iron and steel strips. This would mean the tariff duty is leviable on all types of strips as known to the market. If therefore, cold rolled strips have come into existence, duty would be leviable on them; it is immaterial that they have been manufactured from duty paid hot rolled strips. He relies for the aforesaid proposition on the Supreme Court's judgment in the case of Empir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... however, have to be examined for the period 1st August, 1983 onwards to January, 1984 and for the goods under seizure. 4.2 Tariff Entry has undergone a change w.e.f. 1-8-1983. It reads as follows in so far as the iron and strips are concerned :- "25. Iron and steel products thereof the following namely: (1) to (12).........................., (12) Hoops, strips and skelp of iron or steel whether galvanised or not - (i) hoops and strips, (ii) skelp" In the said Tariff Entry 'Strips' have been further defined in Clause (xiv) to the Explanation to the Tariff Entry as follows :- "(xiv) 'strips' means hot or cold-rolled products, approximately in rectangular cross-section of thickness usually 10 millimetres and below with mill, rolled, trim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that 30% reduction in thickness has to be achieved in a single pass so as to treat the process as one of cold rolling and not otherwise. In the absence of any evidence to this effect, we are unable to accept the contention of the appellants that they are not undertaking the process of cold rolling and cold rolled strips have not been produced by them. 4.5 Next contention of the learned advocate for the appellants is that what they had produced are not cold rolled strips as known to the market. Their machinery is of such crude character that these cannot be considered as cold rolling mills. In this connection, he relies on Tribunal's decision in Calcutta steels 1991 (54) E.L.T. 90 (Tribunal). 4.6 We have considered this submission of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ority has denied this benefit on the ground that the appellants did not take a Central excise licence and consequently did not apply for availing of the procedure for proforma credit. This we think is not a sufficient reason for denying the proforma credit and determining the duty liability after reducing the element of duty paid on hot rolled strips. It is not disputed by the department that iron and steel products are covered under the scheme of Rule 56A. We, therefore, direct that the duty liability of the appellants should be redetermined for the period 1-8-1983 to January 1984 after reducing the element of duty payable on the hot rolled strips. 4.8 As regards the goods under seizure on the basis of our findings that they are cold roll ..... X X X X Extracts X X X X X X X X Extracts X X X X
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