Steel Strips Ltd. Vs. Collector of C.E - Court Judgment

Excerpt:
1. the question that arises for decision in this appeal is whether hot rolled strips which are being converted to cold rolled strips in the appellants' factory become liable to duty once again. the appellants are inter alia engaged in such conversion and have been paying duty on the cold rolled strips allegedly under protest as stated by them. the department consistently held that cold rolled strips produced by the appellants become liable to duty. the assistant collector and later, in appeal, the collector of central excise (appeals) held so. hence this appeal.2. we heard shri sinha, learned advocate for the appellants. he submitted that the matter relates to the period 29.3.1982 to 28.2.1986.upto 31.7.1983 "strips" were classified under tl 26aa and after this date they were classified under tl 25(12) cet. with effect from 28.2.1986, cold rolled strips were classifiable under tl 7211.31 and hot rolled strips, depending on the size, were to be classified under tl 7211.32 or 39. the learned advocate submitted that there having been no clearances on 28.2.1986, that day may be ignored.3. shri singh further submitted that the identical question was examined by the tribunal and orders passed in respect of the same appellants (order no. 173/85 in appeal no. ed/sb(t)/2/82-b1 in the case of . atma steel private ltd., derabassi v. collector of central excise chandigarh) -1988 (36) elt 129. he pleaded that interest should be ordered to be paid on the amounts payable to the appellants, as these payments were unduly delayed.4. shri nigam, learned sdr submitted that while the issue was covered by the judgment of the tribunal cited by the appellants, while passing the said order the tribunal did not take certain vital points into consideration. he argued that if the interpretation given by the tribunal (to the effect that whether they were hot rolled strips or cold rolled strips they were all strips) the notification would become redundant. he further submitted that after the tribunal passed the judgment in the case of . atma steel private ltd.{supra) the larger bench of the tribunal passed orders in guardian plasticoat company ltd. v. collector of central excise, calcutta reported in 1986 (24) elt 542 holding a different view, though the commodity involved in that appeal was different. he pleaded that cold rolled strips are different from hot rolled strips and submitted that there would be no double taxation if duty is paid on both items as only differential duty is payable and proforma credit would be available.5. in his rejoinder the learned advocate submitted that the judgment of the tribunal in atma steel private ltd. (supra) has become final, not having been set aside or stayed by the supreme court. no other judgment dealt with the same question as is now before us. therefore, it has to be followed as binding. he also submitted that empire industries judgment of the supreme court [1985 (20) elt 179 sc] is now before the larger bench. he also referred to the judgment of the supreme court in collector of central excise, bombay v. kiran spinning mills [1988 2 supreme court cases 348] and submitted that according to this judgment conversion of polyester fibre tow into staple fibre did not involve manufacture. the learned advocate also submitted that the appellants have been paying duty under protest for a long time from 1982 and interest may be ordered to be paid in view of the loss to which they have been put.6. we have considered the arguments of both sides. we note that the judgment of the supreme court in empire industries (supra) was considered by the appellate authority while passing the order. we have perused the judgment of the supreme court (decided on 15.2.1988) in kiran spinning mills (supra). in this judgment the supreme court considered the earlier orders of the same court in several other matters including empire industries ltd. and ujagar prints v. union of india 1987 (27) elt 567 (s.c.). therefore, we do not accept the submissions made by shri nigam that the earlier judgment should not be followed.7. also, as correctly submitted by shri sinha the judgment of the tribunal related to the same question and of the same appellants as are now before us. this order has not been set aside by the supreme court.there is no other order on the same question before us. therefore, we disregard the arguments of the learned sdr against following the earlier order of the tribunal which, individually, is in accordance with the supreme court's judgment in kiran spinning mills. we allow this appeal.8. we have considered the plea of the learned advocate for grant of interest. there is neither any justification for award of interest in this matter nor is there any provision in law under which we can grant interest. no such provision could be cited by the learned advocate when he was questioned by the bench. we, therefore, reject the appellant's request for payment of interest.

Judgment:
1. The question that arises for decision In this appeal is whether hot rolled strips which are being converted to cold rolled strips In the appellants' factory become liable to duty once again. The appellants are Inter alia engaged in such conversion and have been paying duty on the cold rolled strips allegedly under protest as stated by them. The Department consistently held that cold rolled strips produced by the appellants become liable to duty. The Assistant Collector and later, In appeal, the Collector of Central Excise (Appeals) held so. Hence this appeal.

2. We heard Shri Sinha, learned Advocate for the appellants. He submitted that the matter relates to the period 29.3.1982 to 28.2.1986.

Upto 31.7.1983 "strips" were classified under Tl 26AA and after this date they were classified under Tl 25(12) CET. With effect from 28.2.1986, cold rolled strips were classifiable under Tl 7211.31 and hot rolled strips, depending on the size, were to be classified under Tl 7211.32 or 39. The learned Advocate submitted that there having been no clearances on 28.2.1986, that day may be ignored.

3. Shri Singh further submitted that the identical question was examined by the Tribunal and orders passed in respect of the same appellants (Order No. 173/85 in Appeal No. ED/SB(T)/2/82-B1 in the case of . Atma Steel Private Ltd., Derabassi v. Collector of Central Excise Chandigarh) -1988 (36) ELT 129. He pleaded that interest should be ordered to be paid on the amounts payable to the appellants, as these payments were unduly delayed.

4. Shri Nigam, learned SDR submitted that while the issue was covered by the judgment of the Tribunal cited by the appellants, while passing the said order the Tribunal did not take certain vital points into consideration. He argued that if the interpretation given by the Tribunal (to the effect that whether they were hot rolled strips or cold rolled strips they were all strips) the notification would become redundant. He further submitted that after the Tribunal passed the judgment in the case of . Atma Steel Private Ltd.{supra) the Larger Bench of the Tribunal passed orders in Guardian Plasticoat Company Ltd. v. Collector of Central Excise, Calcutta reported in 1986 (24) ELT 542 holding a different view, though the commodity involved in that appeal was different. He pleaded that cold rolled strips are different from hot rolled strips and submitted that there would be no double taxation if duty is paid on both items as only differential duty is payable and proforma credit would be available.

5. In his rejoinder the learned Advocate submitted that the judgment of the Tribunal in Atma Steel Private Ltd. (supra) has become final, not having been set aside or stayed by the Supreme Court. No other judgment dealt with the same question as is now before us. Therefore, it has to be followed as binding. He also submitted that Empire Industries judgment of the Supreme Court [1985 (20) ELT 179 SC] is now before the Larger Bench. He also referred to the judgment of the Supreme Court in Collector of Central Excise, Bombay v. Kiran Spinning Mills [1988 2 Supreme Court cases 348] and submitted that according to this judgment conversion of polyester fibre tow into staple fibre did not involve manufacture. The learned Advocate also submitted that the appellants have been paying duty under protest for a long time from 1982 and interest may be ordered to be paid in view of the loss to which they have been put.

6. We have considered the arguments of both sides. We note that the judgment of the Supreme Court in Empire Industries (supra) was considered by the appellate authority while passing the order. We have perused the judgment of the Supreme Court (decided on 15.2.1988) in Kiran Spinning Mills (supra). In this judgment the Supreme Court considered the earlier orders of the same court in several other matters Including Empire Industries Ltd. and Ujagar Prints v. Union of India 1987 (27) ELT 567 (S.C.). Therefore, we do not accept the submissions made by Shri Nigam that the earlier judgment should not be followed.

7. Also, as correctly submitted by Shri Sinha the judgment of the Tribunal related to the same question and of the same appellants as are now before us. This order has not been set aside by the Supreme Court.

There Is no other order on the same question before us. Therefore, we disregard the arguments of the learned SDR against following the earlier order of the Tribunal which, individually, is in accordance with the Supreme Court's judgment in Kiran Spinning Mills. We allow this appeal.

8. We have considered the plea of the learned Advocate for grant of interest. There is neither any justification for award of interest in this matter nor is there any provision in law under which we can grant interest. No such provision could be cited by the learned Advocate when he was questioned by the Bench. We, therefore, reject the appellant's request for payment of interest.