1983 (4) TMI 259

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..... rods. During the major part of this period, upto 17-6-1977 to be exact, exemption Notification No. 67/73-C.E. fixed the effective rate of duty for the relevant category of steel rods and steel wire at ₹ 165/- per m.t. The proviso to this notification gave a further reduction of ₹ 75/- per m.t. if the rods and wire were manufactured out of specified types of scraps etc. With the aid of electric furnace. In other words, in such a case the effective duty payable both on rods and wire was only ₹ 90/- per m.t. (Rs. 165 minus ₹ 75). The show cause notice issued to the appellants states that they obtained their rods from M/s Mukand Iron and Steel Ltd., Bombay, who paid the duty of ₹ 90/- per m.t. on such rods (meaning .....

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..... r assertion of the Department was effectively rebutted by the appellants by producing their classification list No. 61/76 in which `nil rate of duty was duly approved by the Department on 27-11-1976 for the steel wire manufactured by them and by citing from their memorandum of appeal in which they had stated that denying them the benefit of Notification No. 67/73-C.E. would lead to absurd results. It has also been the appellants plea that since rods and wire fall in the same sub-item of the Tariff [item 26AA (ia)] and carry the same rate of duty, making wire from rods, did not amount to manufacture and no question of payment of any duty on wire arose (AIR 1976 S.C. 800). During the hearing before us, they raised a new plea of portion of t .....

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..... pplicable to the specified products provided they are made with the aid of electric furnace and out of specified categories of scraps etc. The function of an electric furnace is only to melt the scrap and iron so that steel ingots can be cast from the liquid metal. In the further process of rolling the ingots into wire rods and then drawing wires out of such rods, the electric furnace has no role to play. The only reasonable interpretation of the proviso, therefore, is that the further concession contemplated therein is applicable to all the specified products made out of steel ingots which were manufactured with the aid of electric furnace and out of specified categories of scraps etc. There is no dispute that both steel wire rods and stee .....

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