Judgment:
1. The appellants filed this appeal against the order-in-original dated 4th April, 1988 passed by the Collector, Central Excise, Pune. In the impugned order, the Collector, Central Excise held that the appellants are not eligible for the exemption under Notification No. 208/83-Cp., dated 1-8-1983 and confirmed the demand.
2. The appellants are engaged in the manufacture of M.S. Round bars.
The officers of the respondent visited the factory of the appellants on 11-3-1987 and found that the appellants are manufacturing M.S. Round bars from the scraps and plates and they were clearing the bars without payment of duty. A show cause notice was issued and in reply to the show cause notice, the appellants submitted that the material used for manufacture of final product is scrap and the appellants are purchasing scrap from the market being re-roll-able scrap and the scrap consists of cut pieces of bars, plates, angles etc. and they claimed the benefit of Notification No. 208/83-C.E., dated 1-8-1983. After adjudication, the impugned order was passed. In the impugned order, the Collector, Central Excise held that the appellants are manufacturing M.S. Round bars falling under T.I. 25(9)(ii) of the erstwhile Tariff and under Chapter "f sub-heading No. 7209.90 of the new tariff and this product is exempted from duty under Notification No. 208/83-C.E. if manufactured out of the description of inputs mentioned in column (2) of the Table and the inputs used in the manufacture of final product are not covered under the description of inputs attached to the Table of the Notification.
3. Ld. Counsel appearing on behalf of the appellants submits that the appellants are using used and old re-rollable cut pieces of bars, plates, angles etc. falling under the erstwhile Tariff Item Nos. 25 (6)(ii), (6)(iii), (7)(ii), (9)(ii). He submits that the final product that is M.S. Round bar falls under T.I. No. 25(ii) of the erstwhile Tariff and under sub-heading No. 7209.90 of the new tariff. He submits that the inputs used in the manufacture of M.S. Round bars are covered under the description given in the column (2) of the Table attached to Notification No. 208/83-C.E., dated 1-8-1983. He submits that the inputs are used in the manufacture of final product without taking any credit of duty paid on the inputs. He submits that the respondent has wrongly held that the inputs as scrap. He submits that waste and scrap of iron or steel is that which is fit only for recovery of metal or for use in the manufacture of chemicals. He submits that the inputs used by the appellants are re-rollable material and under the re-rollable process, the inputs are heated to a specific temperature where the t inputs become a rod and loose its identity, thereafter the inputs are passed through re-rollers for getting the desired shape and dimension.
In these circumstances, he submits that the inputs are used by the appellants are re-roll-able material and not scrap. He also pleaded that the demand is time barred.
5. We have heard both sides. In this case, the benefit of Notification No. 208/83-C.E., dated 1-8-1983 was denied on the ground that the final product that is M.S. Round bars are manufactured from the inputs which are not covered under the column (2) of the Table annexed to the Notification. It was admitted by the appellants that the M.S. Round bar, the final product falls under T.I. 25(9)(ii) of the erstwhile Tariff and tinder sub-heading No. 7209.90 of the new Tariff.
6. The relevant portion of the Notification No. 208/83-C.E., dated 1-8-1983 is reproducted below : "In exercise of the powers conferred by Sub-rule (1) of rule 8 of the Central Excise Rules, 1944 the Central Government hereby exempts goods of the description specified in column (3) of the Table hereto annexed (such goods being hereinafter referred to as 'final products') and falling under Item No. 25 of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944) from the whole of the duty of excise leviable thereon under section 3 of the said Act: Provided that such final products are made from any goods of the description specified in the corresponding entry in column (2) of the said Table (such goods being hereinafter referred to as 'inputs') and falling under the said Item on which the duty of excise leviable under the Customs Tariff Act, 1975 (51 of 1975), as the case may be, has already been paid : Provided further that on credit of the duty paid on the inputs has been taken under Rule 56A of the said rules.
Explanation. - For the purposes of this notification, all stocks of inputs in the country, except such stocks as are clearly recognisable as being non-duty paid, shall be deemed to be inputs on which duty has already been paid.--------------------------------------------------------------------------------S. No. Description of inputs Description of final products--------------------------------------------------------------------------------(1) (2) (3)--------------------------------------------------------------------------------2.
Goods falling under Goods falling under Sub-items Sub-items 6(ii) and (iii), (4)(ii),(6)(ii) and (iii), (7)(ii), (8), 7(ii), (8), (9)(ii), and (11) (9)(ii), (10), (11), (14) and (16)(ii) of the said Item.
of the said Item-flats exceeding 54.
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...-------------------------------------------------------------------------------- 7. The Notification provides that M.S. Round bar falling under T.I. No.25(9)(ii) are exempted from duty if they are manufactured out of the inputs falling under Sub-items (6)(ii) and (iii), (7)(ii), (8), (9)(ii), and (11) of the Item No. 25 of the First Schedule of the Central Excises and Salt Act, 1944. The Sub-items (6)(i) and (ii) "Puddled bars and pilings of iron" and "Ingots, blocks, lumps and similar forms of steel." Sub-item (7)(ii) of Item 25 of the First Schedule includes "Blooms, billets, slabs and sheet bars and hoe bars of iron and of steel." Sub-item (8)(ii) of Item No. 25 includes "Pieces roughly shaped by rolling or forging of iron or steel". Sub-item (11) of Item No. 25 of the schedule includes "Angles, shapes and sections of iron or steel, not elsewhere specified, other than slotted angles and slotted channels, rolled, forged, extruded, formed, finished; sheet piling of iron or steel whether or not drilled, punched or made from assembled elements." 8. In the present case, the M.S. Round steel bars were manufactured by the appellants out of the scrap purchased from the market which consists of cut pieces of bars, plates, angles etc. and these inputs are not covered under the column (2) of the Table annexed to the Notification No. 208/83-C.E., dated 1-8-1983. The Notification No.208/83-C.E., dated 1-8-1983 was amended by Notification No. 79/86-C.E., dated 10-2-1986 on the introduction of new Tariff. Notification No.208/83-C.E., dated 1-8-1983 as amended provides as under : as amended by 38/84-C.E., dated 1-3-1984, *79/86-C.E., dated 10-2-1986 Iron and steel final products, made from duty-paid inputs on which proforma credit has not been taken, are exempt from basic excise duty.
In exercise of the powers conferred by Sub-rule (1) of rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts goods of the description specified in column (3) of the Table hereto annexed (such goods being hereinafter referred to as "final products") and falling under Chapter 72 or 73, as the case may be, of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), from the whole of the duty of excise leviable thereon under section 3 of the Central Excises and Salt Act, 1944 (1 of 1944): Provided that such final products are made from any goods of the description specified in the corresponding entry in column (2) of the said Table (such goods being hereinafter referred to as "inputs") and falling under either of the said Chapters on which the duty of excise leviable under the said section 3, or the additional duty leviable under the Customs Tariff Act, 1975 (51 of 1975), as the case may be, has already been paid : Provided further that no credit of the duty paid on the inputs had been taken under Rule 56A of the said rules.
Explanation. - For the purposes of this notification, all stocks of inputs in the country, except such stocks as are clearly recognisable as being non-duty paid shall be deemed to be inputs on which duty has already been paid.--------------------------------------------------------------------------------S.No. Description of inputs Description of final products.--------------------------------------------------------------------------------(1) (2) (3)2.
Goods falling under Sub- Goods falling under Sub- heading Nos. 7206.20, 7206.90, heading Nos. 7204.20, 7206.20, 7207.20, 7208.00, 7209,90 and [7206.90], 7207.20, 7208.00, 7210.10 7209.90, 7210.10, 7213.00, 7302.10 and 7307.20 flats3.
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...-------------------------------------------------------------------------------- 9. The M.S. Round bars manufactured by the appellants admittedly fall under sub-heading No. 7209.90 of the Tariff. The Notification No.208/83-C.E., dated 1-8-1983 as amended grants exemption of duty if M.S.Round bars manufactured from the inputs falling under sub-heading Nos.
7206.20,7206.90, 7207.20, 7208.00,7209.90 and 7210.10.
10. sub-heading No. 7206.20 includes "Ingots, blocks, lumps and similar forms of steel." sub-heading No. 7206.90 includes "other", puddled bars, pilings, ingots, blocks, lumps. Similarly the sub-heading No.7207.20 covers "Blooms billets, slabs and sheet bars of steel." sub-heading No. 7208.00 of the Tariff covers "Pieces roughly shaped by rolling or forging or iron or steel, not elsewhere specified." sub-heading No. 7209.90 includes " Bars (including flats) and rods or iron or steel." sub-heading No. 7210.10 includes "Angles, shapes and sections (other than slotted angles and slotted channels)." 11. As we have already observed that the appellants are manufacturing M.S. Round bars out of the scrap purchased from the market consist of cut pieces of bars, plates, angles etc. These inputs are not covered under the column (2) of the Table annexed to the Notification No.208/83-C.E., dated 1-8-1983 as amended.
12. In the show cause notice, it was specifically mentioned that the appellants suppressed the facts that their final products are manufactured out of the inputs which are not covered under the Notification No. 208/83-C.E., dated 1-8-1983 and it was only discovered on 11-3-1987 when the officers of the respondent visited the factory.
Hence the extended period is rightly invoked.
13. In view of the above discussion, we do not find any infirmity in the impugned order. The appeal is dismissed.