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TMI Blog2006 (10) TMI 455X X X X Extracts X X X X X X X X Extracts X X X X ..... ase as unfolded in the memo of writ petition is that the appellant was registered as Small Scale Industries unit with the Directorate of Industries. It had obtained a license from the Central Excise Department, Jodhpur in July, 1976 for manufacturing stainless steel products covered by item no. 26 AA of the first schedule of tariff appended to the Central Excise Salt Act, 1944(in short the Act of 1944 ). The appellant had purchased duty paid stainless steel flats/plates/patas/bars etc. and had also purchased fresh unused re-rollable scrap known as `pata' from the open market as well as from prime producers for re-rolling them. The appellant submitted a classification list (No.219/80) before the Superintendent, Central Excise, Range, Jodhpur for the period effective from 1.8.1980. It was submitted therein that hot as well as cold rolled sheets manufactured from fresh unused unrollable scrap-namely; plate pieces, flat pieces, pata pieces etc. purchased or received on job basis were entitled to exemption from duty of central excise to the extent of ₹ 330/- per M.T. in terms of notification No.76/72 dated 17.3.1972. Assistant Collector, Central Excise, Jodhpur after prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mely stainless steel patties/patas were not entitled to exemption under notification No.76/72 as the inputs used by it were not `scrap' within the meaning of said notification. The Tribunal further observed that the appellant did not apply the procedure under Rule 56-A of the Central Excise Rules, 1944(in short the Rules of 1944). The Tribunal however held that the declaration by the appellant in the classification list was not deliberate or willful as it was not based on any concealment or omission of fact. The Tribunal therefore set aside the penalty and upheld the order of the Collector in other respect. Superintendent, Central Excise, Range, Jodhpur after the judgment of the Tribunal required the appellant by a notice dated 24.3.1984 to pay differential amount duty and threatened to realise the same by coercive process. It was on these premises that the aforesaid petition was filed by the appellant with the prayers extracted above. 5. The aforesaid writ petition was contested by the respondents by filing a reply. It was denied that the appellant had been purchasing `fresh unused un-rerollable scrap' known as 'pata'. Number of documents which the appellants h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Notification No.75/67 as per their earlier classification list which granted benefit of exemption of duty equivalent to duty paid on the material of iron and steel products falling under T.I. 26 AA provided these were made from articles falling under the same tariff item. Subsequently, when the said notification was rescinded the appellant in order to avail the benefit of set off under Notification No.76/72 declared the raw material as fresh unused re-rollable scrap to suit the wordings of the Notification no. 76/72 although there was no change in raw material used in either under the old Notification no. 75/67 or under the new Notification No.76/67. It was therefore prayed that the writ petition filed by the appellant be dismissed. 6. Learned Single Judge by his order dated 4th October, 1985 dismissed the writ petition and held that when subsequent to dis-approval of the classification list No.219/80 by Collector, a revised classification list was issued by the Assistant Collector pursuant to directions given by order dated 9th June, 1983, the appellant ought to have challenged the revised classification list. It was therefore held that since according to order of the Collect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rit petition and such an order has remained in force more than ten years, that by itself would not justify non-decision of the petition on merits on analogy of the money retained by the appellant having earned further money by way of interest @ 10% per annum. No party can be made to suffer for acts or omissions on the part of the Court and if the writ petition was not decided for more than ten years, that cannot afford a reason for not deciding it on merits. 9. On merits of the case, Mr. Rajendra Mehta, learnedcounsel for the appellant argued that the raw material used by the appellant namely pieces of SS flats/plates/pattas were fresh unused re-rollable and therefore finding to the contrary recorded in the impugned order was absolutely wrong and wholly unsustainable. Collector was not competent to revise the classification list. Exemption notification referring to scrap which could only be pieces of the products which are rerollable. Hence scrap of fresh unused re-rollable flats/sheets/plats/pattas could only be usable pieces of these products. The left over of the products manufactured by the primary producers which are not usable/re-rollable cannot be treated as scrap. It was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur, learned Assistant Solicitor General for Union of India supported the order/judgment passed by the Collector and the Tribunal and the judgment passed by the learned Single Judge. He argued that there was sufficient material with the Collector to hold that raw material used by the appellant did not fall within the purview of fresh unused un-rollable scrap. The documents under which such raw material was received by the appellant clearly proved their description as SS flats/plates/pattas. Nowhere were they described as fresh unused un-rollable scrap. All this was proved from copies/invoices/challans which the Superintendent, Central Excise, Jaipur seized from the factory premises of the appellant. According to him, raw material used by them were cut to size pieces of flats/plates/pattas which cannot be described as scrap. Since the appellant had been purchasing/acquiring flats/plates/pattas and then cutting them to size for re-rolling according to their requirement, such material cannot be classified as fresh unused un-rollable scrap. So far as the instructions of the Board dated 22.9.1962 and 22.4.1966 are concerned it was argued that they were mainly executive instructions and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1944. In this Notification the Central Government exempted iron and steel products falling under Item No. 26 AA of the First Schedule of tariff appended to the Rules of 1944 and made from old and used rerollable scrap without undergoing the process of melting or from fresh unused re-rollable scrap on which appropriate amount of duty has already been paid, from so much of the duty of excise leviable on such products as is equivalent to the duty of excise leviable on semi-finished steel falling under subitem (i) of the aforesaid item . There was however an exception to the said exemption Notification that this benefit would not be available to manufacturer who avails of the special procedure prescribed under Rule 56A in respect of the duty paid on the said scrap. The appellant submitted classification list No.219/80 to the Superintendent, Central Excise,Range,Jodhpur effective from 1st August, 1980. It was claimed that hot as well as cold rolled sheets manufactured from `fresh unused un-rollable scrap' namely; plate pieces, flat pieces, pata pieces etc. purchased or received on job basis were entitled to exemption from duty of central excise to the extent of ₹ 330/- per M. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant is capable of re-rolling only the small pieces of semi finished steel plates/flats/pattas which the appellant procured form cutting of the S.S. plates/flats/pattas into small and different sizes as per requirement to suit their re-rollable machine, it cannot be accepted that the raw material siezed to remain `fresh unused re-rollable scrap'. The very significance of the words `fresh unused and re-rollable' should qualify the meaning of the word `scrap'. In that meaning this would be a scrap of kind which consist of fresh unused rerollable sheets with whatever names called namely; plates/flats/pattas. Such smaller pieces are essentially procured from the regular size sheets which are already duty paid and therefore attractability of the said notification no. 76/72 is dependent on the condition that only such iron and steel products falling under sub-items(ii) and (iii) of Item No. 26 AA of the First Schedule to the Rules of 1944 would be exempted which are made from `fresh unused un-rollable scrap' on which appropriate amount of duty has already been paid. 15. Whether the appellant procure such raw material from the prime manufactures or from the open ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etition have not led to any decision on merits of the case. Merely because the appellant did not challenge the revised classification list made by the Assistant Collector in pursuance of the order of the Collector dated 9th June, 1983, this could not debar it from challenging the basic order of the Collector which was in fact subsequently upheld by the Tribunal and both those orders were under challenge in the writ petition. The writ petition also could not be dismissed simply because the appellant could choose alternative method of claiming relief of input of duty by way of set off under Rule 56-A which was altogether different machenism and if the appellant had the option to claim benefit of partial exemption, it could not be asked to restrict to the regular mode of claiming set off. 17. Yet another reason extended by the learned Single Judge in dismissing the writ petition was that demand of differential amount of duty having remained stayed for more than ten years, the appellant by now @ 10% p.a. would have earned the amount of interest equal to the differential amount, therefore, if now required to pay the duty without interest, no factual injury would be caused to the them ..... X X X X Extracts X X X X X X X X Extracts X X X X
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