J. K. STEEL LTD. versus UNION OF INDIA

Citation: [1969] 2 S.C.R. 481 · Decided: 18-10-1968 · Supreme Court of India · Bench: S.M. SIKRI · Disposal: Dismissed

Cited by 6 judgment(s) · cites 3 · see the full citation network in Lexace

Judgment (excerpt)

A 
B 
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H 
J. K. STEEL LTD. 
v. 
UNION OF INDIA 
October 18, 1968 
[S. M. SrKRI, R. S. BACHAWAT AND K. S. HEGDE, JJ.) 
Central Excise and Salt Act (I of 1944), First Schedul.e, item 25AA, 
Indian Tariff Act (32 of 1934), First Schedule, entry 63(36) and Finance 
Act (20 of 1962)-Steel wires made from imported steel rods-Whether 
excise duty is Ieviable. 
Central Excise and Salt Rules, 1944. rr. 9(2) and 10---Wrong rule 
mentioned-No prejudice to assessee-Jj could be justified under the 
correct rule. 
The appellant was a manufacturer of iron and steel products. It 
was importing steel rods from which steel wires were manufactured. 
On 
April 24, 1962 Finance Act (No. 2) 1962 imposed excise duty on iron 
and steel products by introducing item 26AA in the Central Excise and 
Salt Act, 1944. Under that item, on wires, 5% ad valorem plus 
the 
excise duty for the time being lcviable on pig iron and steel ingots as 
the case may be was payable. 
Pig iron and steel ingots were already 
subject to excise duty under items 25 
and 
26 
respectively. 
On the 
same day, the first Schedule of the Tariff Act 1934 was amended and 
two Notifications Nos. 70 and 77 were issued in exercise of the powers 
conferred by r. 8 (I) of the rules framed under the E~cise Act. 
In the 
Tariff Act item 63 (36) which deals with imported iron and steel pro-
ducts was added to the First Schedule by Finance Act (No. 2), 1962. 
The items included therein are the very items set out in item 26AA of 
the Excise Act. 
The standard rule of duty is mentioned as 'the excise 
duty for the tin1e being leviable on like articles if produced or manufac-
tured in India. . . and the duty so leviable shall be in addition to the 
duty which would have been levied if this entry had not been inserted.' 
Under Notification 70, 
the Central Govc.rnment exempted iron 
and 
steel products fall.ing under item 26AA if made from pig iron or steel in-
gots on which the appropriate amount of excise duty has already been paid, 
from so much of the excise duty leviable thereon as is equivalent to the 
duty leviable under item 25 or 26 as the case may be. Under Notification 
77, the Central Government exempted other iron and steel 
products 
falling under sub-items (2). (3), (4) and (5) of item 26AA if made 
from articles which have already paid the appropriate, excise duty under 
sub-item ( 1) of item 26AA. from so much of the excise 
duty 
as 
is 
equivalent to the duty payable under sub-item (I). This 
notification 
was later superseded by another 
Notification No. 89. 
by which the 
Government exempted with effect from April, 24, 1962, iron and steel 
products falling under item 26AA if made from another article falling 
under the said ite.m and havin.g already paid the appropriate amount of 
duty, from so much of the 
excise 'duty as is equivalent 
to the duty 
payable on the said article. 
On and after April 24, 1962, the appel-
lant cleared from its warehouse wires produced from the imported steel· 
rods. 
The required permission from the excise authorities was obtained 
and the duty assessed was paid. 
At that time the excise authorities pro-
ceeded on the basis that only ad valorem duty had to be levied and not 
'excise duty for the time leviable on pig iron or steel ingots.' 
On March 
21, 1963, the assessing authority issued a written demand under r. 9(2) 
demanding steel ingot duty which, according to the authority the appellant 
had evaded to pay. The appellant paid the duty demanded under protest 
482 
SUPREME COURT REPORTS 
[1969) 2 S.C.R 
and appealed to higher authoritie·s. 
The Government, in revision. treated 
the demand as one under r. 10, because, there was no qnestion of any 
evasion by the appellant, and confined the demand to clearances effected 
after December 21, 1962. 
In appeal to this Court against the order of the Central Government, 
the appellant contended that : (I) The clause 'excise duty for the time 
being leviable under the Act on pig iron or steel 
ingots' 
is 
attracted 
only when any pig iron or steel ingot dutiable under the Act is Used 
in the manufacture of any article dutiable under item 26AA (I), and, 
as the steel bars used in 
the manufacture of wire were imported and 
were not made out of steel ingots dutiable under the Act, that part of 
the levy was not att'racted to the wires; and (2) The demand by the 
Central Government was barred by limitation under r. 10. 
HELD: (!) (Per Sikri and Bachawat, JJ.) The excise d

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