- (1.) The demand which is in dispute in this case was raised under the Central Excises and Salt Act, 1944 (referred to hereafter as 'the Act') for the period September, 1968 to January, 1969. The assessee in respect of which the demand was raised was the Indian Tube Company (referred to hereafter as 'ITCO'). During the relevant period ITCO had purchased hot rolled strips from the appellant for the purpose of processing them into cold rolled strips. It is not in dispute that the hot rolled strips had borne excise duty. The cold rolled strips, according to ITCO were only those strips which emerged after the hot rolled strips had been processed and the edges sheared and slit according to the specifications of the customer. ITCO, therefore, paid the excise duty on cold rolled strips according to its definition.
(2.) The Revenue, however, raised the demand on ITCO on the basis that cold rolled strips meant and included unshared and unlit strips. The demand was challenged by ITCO by way of revision under the Act as it then stood. ITCO raised the issue that cold rolled strip should be understood as an item which is saleable and treated as completed manufactured product. According to the appellant what came out from the mill were not cold rolled strips until they were trimmed/sheared and cut to proper length according to the customers requirement. The residue was scrap which were of three kinds : viz., side trimmings, crop ends and reversible mill ends and could not be treated as cold rolled strips. There is some controversy as to whether duty had been paid by ITCO on the residue treating the same as scrap. The revisional application was however rejected on the ground that the Indian Standard Specification Nos. 1956 to 1962 specified that a strip "is supplied in straight length or in coil with mill, trimmed or sheared edges". From this definition the Revisional Authority came to the conclusion that the strips were marketable with "mill edges". However, as far as reversible mill ends were concerned it was held to be "not cold rolled strips" and it was directed that they should be correctly treated a scrap for the purposes of the tariff.
(3.) ITCO filed a writ petition challenging the revisional order. In the Writ Petition, ITCO again raised the issue that the process of manufacture was not complete until the process of slitting and cutting had been carried out. In its writ petition, ITCO also claimed a refund of Rs. 1,69,508.31 on account of the excise duty paid by it on reversible mill ends which had not been granted by the Revenue.;