TIGRANIA METAL AND STEEL INDUSTRIES Vs. COLLR OF C EX AND CUSTOMS

JUDGEMENT

(1.) FOR hearing the applicants appeals on merits, M/s. Tigrania Metal & Steel Industries are required to deposit a sum of Rs. 69,73,171.87 towards duty and Rs. 5.00 lacs towards penalty and the applicants covered by Stay applications 514/89 and 515/89 are required to deposit a sum of Rs. 1.00 lac and Rs. 2.00 lacs respectively, towards penalty.

(2.) Shri A. Satalvad, the learned Senior Counsel appearing on behalf of the applicants, contended that the applicants are re-rollers of iron and steel products. They were availing exemption under Notification No. 208/83. They were getting ship breaking scrap in the form of various steel materials like bars, flats, angles, etc. The Collector issued a show cause notice on 26-7-1988 on the ground that the exemption contemplated in the aforesaid notification is not admissible to them and there had been a deliberate suppression of material facts relating to input used and sought to confirm the demand for the period 1-8-1983 to 31-3-1986, though the show cause notice is clearly time barred. He contended that prior to 1-3-1986, there was no separate sub-heading in regard to Ship Breaking Scrap. Scrap of iron and steel which is used for recovery of metal by melting was only covered by a separate sub-item. In the case of the applicants, they do not have a furnace and they are only re-rollers, where the defective scrap materials like bars, flats, angles, etc., which are known as re-rollable scrap are brought in as inputs. The department does not deny that the final products are specified in the Notification and the inputs namely, bars, flats, angles etc., are also specifically figuring in the Tariff Items mentioned in the column relating to inputs. After 1-3-1986, Excise Tariff was replaced by a comprehensive Tariff and in the new Tariff, ship breaking scrap came to be separately introduced as a sub-item. Prior to 1-3-1986 there was no separate sub-item or item for re-rollable scrap and they are to be classified under the respective sub-items of Tariff Item 25 depending on the category of such re-rollable scrap. He, therefore, contended that the classification list has been filed giving the inputs as re-rollable scrap as also the various sub-items of the inputs as per the Notification. Merely because ship breaking scrap has not been mentioned in the classification list, it does not amount to suppression of facts because, even the material obtained from the ship breaking scrap is only re-rollable scrap and hot a melt scrap. He also pointed out that the invoices in respect of all the scrap received have been gone through by the audit parties and also by various inspecting authorities. None has raised an objection to this input. As regards the period after 1-3-1986, the period involved is only one month and even here within a month they have specifically mentioned the description of input as per the new Tariff in the declaration filed for availment of MODVAT Credit. He, therefore, contended that there was absolutely no intention to suppress any material facts justifying either extended period or imposition of penalty on the firm as well as on the manager and the partner.

(3.) HE also pointed out that the Special Bench 'B' of this Tribunal at Delhi have granted adjournment, on the ground that the matter is under consideration of the Government for issue of a notification under Section 11C of the Central Excise Act.