COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH-II versus M/S STEEL STRIPS LTD. ETC.

Citation: [2003] 3 S.C.R. 852 · Decided: 22-04-2003 · Supreme Court of India · Bench: S.N. VARIAVA · Disposal: Disposed off

Judgment (excerpt)

A 
COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH-II 
v. 
MIS STEEL STRIPS LTD. ETC. 
APRIL 22, 2003 
B 
(S.N. VARIAVA AND B.P. SINGH, JJ.] 
Excise Laws: 
Central Excise and Salt Act, 1944-Section 11-B-Sub-heading 
C 7211.51 and 72 !l.52-Cold rolled strips and hot rolled strips-Claimant 
engaged in manufacturing cold rolled steel strips from hot rolled strips-
Claim for refund of excise duty--Tribunal allowing the claim-Department 
holding that hot and cold rolled strips classified under different heads thus 
distinct excisable commodities and they had discharged the burden 
D establishing that new excisable commodity-cold rolled strips was the result 
of process of manufacture undertaken by claimant-.-Claimant denying the 
allegation-On appeals held-There are no clear material on records with 
regard to manufacturing process undertaken by claimant giving rise to duty 
liability-Thus appeals remitted back for fresh consideration. 
E 
Respondent is engaged in manufacturing of cold rolled steel strips. It 
paid excise duty and thereafter tiled application for refund of duty. Assistant 
Commissioner issued notice to the respondent to prove beyond doubt that burden 
of excise duty had not been passed on to the buyers. Thereafter, the Assistant 
Commissioner rejected the claim. Respondents then tiled an appeal which was 
F dismissed. Commissioner of Excise (Appeals) also rejected the claim. However, 
the tribunal allowed the appeal holding that department failed to discharge the 
burden that r~spondent unde11ook the process which resulted in manufacture 
of new excisable commodity and remitted the matter to enable the respondent 
to satisfy that they had not passed the burden of duty to their customers. 
Q_ 
Respondent was also issued notice alleging clandestine removal of cold 
H 
rolled steel strips produced without payment of duty. Commissioner upholding 
the allegation passed an order of recovery of duty, interest, and penalty. However, 
the tribunal set aside the order holding that since no duty was payable on cold 
rolled strips, there was no evasion of excise duty. Hence the present appeals. 
852 
II 
I 
•. 
I 
~' 
-
I 
C.C.E. v. STEEL STRIPS LTD. 
853 
Appellant contended that hot rolled strips and cold rolled strips were A 
classified under two distinct sub-headings under the amended tariff, thus were 
two distinct excisable commodities; and that the Assistant Commissioner 
concluded that the respondent undertook the process of manufacture which 
resulted in the manufacture of cold rolled strips, a new excisable commodity 
from hot rolled strips, also an excisable commodity, therefore, the tribunal 
erred in holding that department had failed to discharge the burden cast upon B 
them to establish that a new excisable commodity was the result of the process 
of manufacture undertaken by the respondents. 
Respondents contended that there was no material on record to establish 
that the respondents undertook a process of manufacture which resulted in C 
the manufacture of another excisable commodity; that the department had not 
produced any evidence in this regard and the observations made by the Assistant 
Commissioner are based either upon his own knowledge or knowledge derived 
from text-books or publications, which were not relevant; that it is for the excise 
authorities to lay such evidence in this behalf before the first adjudicating 
authority; and that the notice issued to the respondents was defective as it did D 
not state the process undertaken by the respondents resultin!( in the 
manufacture of a new product and the department cannot be permitted to go 
beyond the facts stated in the notice. 
Disposing of the appeals, the Court 
HELO: I.I. Jn the order of the Assistant Commissioner there is a 
reference to a process of manufacture undertaken by the respondents and there 
E 
is also some discussion about the manner in which the manufacture of cold 
rolled strips takes place, but the order does not clarify whether any evidence 
was led by the department to satisfy the adjudicating authority in this regard. F 
The Tribunal on the other hand has observed that no evidence has been brought 
on record to show that such process amounted to manufacture so as to give 
rise to duty liability. In this state of the record, matter is remitted for fresh 
consideration on the basis of material on record and to consider and record 
findings on the following questions and dispose of the matters before them in G 
accordance

Excerpt shown. Read the full judgment & AI analysis in Lexace.