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TMI Blog1996 (12) TMI 202X X X X Extracts X X X X X X X X Extracts X X X X ..... appellants in these three appeals under Rule 9(2) of the Central Excise Rules, 1944 read with Section 11A of Central Excises Act, 1944. 3. The appellants in the three appeals are engaged in manufacture of cold twisted deformed steel bars and rods as finished products from steel ingots or billets. Steel ingots are cut into pieces and then subjected to rolling process resulting in intermediate product described as "roughly shaped pieces" and the latter are subjected to hot rolling process in the manufacture of bars and rods which are then twisted using cold process. The dispute in these appeals is whether steel bars and rods so manufactured and cleared during the period from 1-3-1992 to 9-3-1992 were exempt from excise duty or not. According to the appellant, exemption under Notification No. 202/88, dated 20-5-1988 as amended from time to time was available during this period as it was available during the preceding and succeeding periods. The Collector overruled this contention and confirmed the demand for the disputed period. 4. Appellants explained that prior to 1977, the scheme of levy of duty on iron and steel products was three-stage duty, that is, duty on iron, dut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts whose description is specified in Column (2) correspondingly and falling within Chapter 72 or 73 of the Schedule on which the duty of excise leviable under the Schedule or the additional duty leviable under Customs Tariff Act, 1975, as the case may be, has already been paid. Second proviso required that no credit of duty paid on the inputs should have been taken under Rule 56A or 57A of the Rules. The Table has four serial numbers. Serial No. (2), which is relevant reads thus :- TABLE S. No. Description of final products Description of inputs (1) (2) (3) 02 Ingots or other primary forms of (i) non-alloy steel, (ii) stainless steel and (iii) other alloy steel; semi-finished products or (i) non-alloy steel, (ii) stainless steel and (iii) other alloy steel; pieces roughly shaped by rolling of iron or steel; bars and rods of (i) iron, (ii) non-alloy steel, (iii) stainless steel and other alloy steel; angles, shapes and sections of iron or non-alloy steel (other than slotted angles and slotted channels); goods and materials of Chapter 72 or Chapter 73 obtained by breaking up of Granules and powders of steel; ingots or other primary forms of (i) non-alloy steel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng electric resistance wire and electric resistance heating wire). By Notification No. 53/92, dated 10-3-1992 the description of inputs specified in Serial No. 2A has been substituted by the following :- "Ingots, bars, rods and other rollable or re-rollable materials of iron and steel other than stainless steel". 7. We shall examine the scheme of the main notification and the changes brought about by the two later amending notifications. Serial No. (2) of the Table to the original notification specified six kinds of inputs and specified nine kinds of finished products. The following were specified both as inputs and finished products :- (a) Ingots or other primary forms of certain kinds of steel; (b) semi-finished products of certain kinds of steel; (c) pieces roughly shaped by rolling of iron or steel; (d) bars and rods of iron and certain kinds of steel; (e) angles, shapes and sections of iron or non-alloy steel; and (f) goods and materials of Chapters 72 or 73 obtained by breaking up of ships, boats etc. The logic of the above is that any one of these common items could be used as input in the manufacture of certain finished products ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erials can be rolled further or re-rolled. The process adopted by appellants consists of rolling small pieces of iron ingot to obtain roughly shaped pieces and re-rolling the latter to obtain bars and rods. It is admitted that roughly shaped pieces obtained by rolling iron or steel are commercially known excisable goods; in other words, they are intermediate excisable goods. There is no reason to hold that roughly shaped pieces obtained by rolling are not re-rollable. They are re-rollable and it is by re-rolling such pieces that bars and rods are produced. Therefore, as amended Serial No. (2) stood, appellants were entitled to exemption for pieces roughly shaped obtained by rolling steel ingots and as Serial No. (2A) stood, appellants were entitled to exemption for bars and rods obtained from such roughly shaped pieces obtained by rolling steel ingots which attract the description "re-rollable material". 8. Let us advert to the changes brought about by Notification No. 53/92. The description - "Re-rollable material of iron and steel other than stainless steel" was substituted by the following description - "Ingots, bars, rods and other rollable or re-rollable material of ir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t accept the contention for the reason that ingots were not included in the description of inputs in Serial No. (2A) as on 1-3-1992. However, it was not argued in that case that the manufacture of bars and rods was not by an integrated process but by two different processes, namely, rolling ingot into roughly shaped pieces which fall within the ambit of the description "re-rollable material" and rolling such pieces or re-rollable material into bars and rods and such pieces (intermediate products) are used to manufacture bars and rods and hence the Bench which decided the case had no occasion to consider the correctness of the approach placed before us and accepted by us. We hold, with respect, that Saphire Steels (P) Ltd. was not correctly decided. 10. Shri P.K. Jain, SDR contended even if the case falls within the ambit of Serial No. (2A) of the Table as introduced by Notification No. 33/92, dated 1-3-1992, appellant would not be entitled to the benefit of the exemption since as required by the first proviso to Notification No. 202/88, duty had not been paid on the "inputs", roughly shaped pieces (obtained by rolling). The first proviso requires that duty on inputs must have ..... X X X X Extracts X X X X X X X X Extracts X X X X
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