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TMI Blog2000 (9) TMI 658X X X X Extracts X X X X X X X X Extracts X X X X ..... eligible to the benefit of the aforesaid Notification No. 53/80-CE, and were required to pay the appropriate central excise duty under Notification No. 147/77-CE dated 18-6-77 (as amended). Differential duty of Rs. 89,532.01 was demanded for the period 1-4-83 to 31-7-83. In reply among other grounds, the noticees had submitted that the end cuttings used by them were covered by the description 'fresh un-used steel melting scrap' as mentioned in aforesaid Notification No. 53/80-CE. The matter was adjudicated by the Dy. Collector of Central Excise, Ludhiana, who under his order-in-original dated 20-7-94 took a view that the scrap in question was not fresh and un-used steel melting scrap as required to claim the benefit of the exemption Notification. He confirmed the demand of Rs. 89,532.01. No penalty was imposed. The Collector of Central Excise (Appeals) under her order-in-appeal dated 8-12-94 confirmed the view taken by the adjudicating authority. 2. We have heard Shri P.S. Bedi, Consultant for the appellants and Shri S.N. Singh, SDR for the respondent/Revenue. We have analysed the facts on record and have considered the submissions made by both the sides. 3. The issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted below :- 5. Steel melting scrap is that material which arise unavoidably during the course of steel making, castings and finishing operations of the various products produced out of molten metal. It may include such items as pit scrap, ingots too short to roll, rejected ingots, ingot crops, crops ends from blooms and billets, etc. Such scrap may be used for re-rolling or for re-melting for bringing out raw material to be used for producing finished products. Scrap in the form of iron or steel is one of the two principal sources of metallics in steel making; the other principal source is iron from the blast furnaces, either molten as it comes'from the blast furnace (hot metal) or in solid pig form. Runners and risers also arise during the course of steel castings and are covered by the broad description of steel melting scrap. 8. The Revenue had sought to classify such runners and risers under sub-item (3) of Item No. 25 as waste and scrap. As we have referred to above, the waste and scrap for the purposes of sub-item (3) is such waste and scrap of iron or steel which is fit only for recovery of metal or for use in the manufacture of chemicals. The runners and riser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecovery of the metal and could be used for other purposes, such as, rolling. 6. In the case of Rathi Alloys and Steel Ltd. v. Collector of Central Excise - 1990 (47) E.L.T. 205 (S.C.) decided on 6-3-90, the Hon'ble Supreme Court had discussed the nature of steel melting scrap vis-a-vis steel ingots. It was held that the defective runners and risers that were not fit for rolling and were to be melted as scrap were steel melting scrap. The runners and risers that were fit for rolling were given the same treatment as the steel ingots. It is clear from this decision of the Apex Court that the steel melting scrap arise at the stage when molten metal is solidified in the process of manufacture of steel ingots. Reference may also be made to the Supreme Court's decision in the case of Steel Authority of India Ltd. v. Collector of Central Excise, Bolpur - 1997 (90) E.L.T. 287 (S.C.) = 1997 (19) RLT 23 (S.C.) decided on 20-2-97. In this decision, the process which brings the steel melting scrap in existence is given in paras 2 and 8. In the process of production of steel at steel melting shop (SMS), some scrap arises which is known as steel melting scrap. The entire process of manufac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were the same as steel melting scrap for the purposes of Excise Tariff. In the Tribunal's decision aforesaid dated 2-4-98 relied upon by the appellants, reference has been made to the (1) Central Excise Collectorate Chandigarh Trade Notice No. 33/CE/75 (1), iron or steel products, dated 2-7-75 and (2) Tariff Advice No. 16/81 dated 6-2-81. The Trade Notice dated 2-7-75 as appearing at page 353 of Cen-Cus Vol. III 1975 for August, 1975 is extracted below :- CENTRAL EXCISE COLLECTORATE : CHANDIGARH Trade Notice No. 33/CE/75 (1-Iron-or-Steel products) Dated 2-7-75. Steel Ingots Notfn. No. 66/73-C.E., dated 1-3-73 -- Applicability of Attention of the trade is invited to the notification No. 144/75-CE dated the 7th June, 1975 published in Part II, Sections 3, sub-section (i) of the Gazette of India Extraordinary dated the 7th June, 1975 issued in supersession of Notification No. 42/74 dated 1-3-74. 2. Prior to issue of notification No. 144/75 steel scraps used for melting by the Electric Furnace units had been subjected to duty at the product stage under Item 26AA of Central Excise Tariff and consequently the ingots produced by them had to be an inequitous duty burden, in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S [Tariff Item 26 AA] It is considered that cut-ends of M.S. Round Bars, which can be re-rolled as such, would be treated as Bars and assessed to duty under Item No. 26AA-CET and where the cut-ends of M.S. Round Bars cannot be re-rolled as such, these would be regarded as melting scrap for assessment under Item No. 26-CET but would be entitled for exemption under Notification No. 54/64-CE dated 1-3-64. C.B.E. & C. Tariff Advice No. 16/81, dated 6-2-81 In this Tariff Advice, the matter relates only to the cut ends of mild steel round bars. We do not consider that the Trade Notices advance the case of the appellants. 8. Similarly, Supreme Court's decision in the case of Tata Iron and Steel Co. Ltd. v. Collector of Central Excise - 1995 (75) E.L.T. 3 (S.C.) is not applicable to the facts before us. The issue for consideration in that decision was whether the scrap composed of arisings of steel mills such as cuttings of rails, billets, plates, axles, channels, etc. and obtained by the appellants in the course of manufacture of iron and steel and steel products was re-melting scrap dutiable under Item No. 26 or Item No. 26AA of the erstwhile Central Excise Tariff. The Apex Cou ..... 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