STEEL ROLLING MILLS OF BENGAL LTD. versus UNION OF INDIA AND ORS. ETC.

Citation: [1992] SUPP. 1 S.C.R. 975 · Decided: 14-10-1992 · Supreme Court of India · Bench: S. RANGANATHAN · Disposal: Dismissed

Judgment (excerpt)

STEEL ROLLING MILLS OF l:IENGAL LTD. 
v. 
UNION OF INDIA AND ORS. ETC. 
OCTOBER 14, 1992 
(S. RANGANATHAN, V. RAMASWAMI AND 
B.P. JEEVAN REDDY, JJ.] 
Central Excises and Salt Act, 1944/Central Excise Rules, 1944: 
A 
B 
Sections 3, 35-L, Items 26AA of First Schedule/Ru/es 12, 12-A and C 
Notification No. 197162-Rebate on duty paid on the excisable goods ex-
ported-Whether admissiblr on duty paid on the raw material used in the 
furnished product. 
The appellants were carrying on business as rerollers.of Iron and 
steel products. They purchased billets from the stockyard of three major D 
steel companies and either rolled or re-rolled these ~illets or got them 
rolled by other re-rollers into M.S. Flats (Hoops) and exported them on 
payment of central excise duty. The concessional rate of duty levied on 
billets 'Was Rs. 330 per metric ton and on Flats Rs. 120 per metric ton. 
As and when appellants exported the said M.S. Flats (Hoops), they 
tiled applications for rebate or duty on the goods so exported claiming foll 
rebate of Rs. 450 per metric ton or Flats exported. 25 or such claims were 
allowed by the authorities. 
E 
Howtver, subsequently, on the ground that excessive rebate had been F 
given and that the appellants were not entitled to rebate or duty of Rs. 330 
per metric ton paid on the billets or that it was not admissible, the 
Collector of Central Excise passed orders demanding return of the exces· 
sive amount Involved in 25 claims and reducing the claim for rebate in 21 
cases and restricting the rebate to the sum of Rs. 120 per metric ton paid G 
on M.S. Flats when the goods were cleared from the factories. On rejection 
of the appeals preferred against this order by the Central Board of Excise 
and Customs, the appellants preferred appeals to CEGAT. 
The Tribunal held that rebate was admissible only In respect or the 
central excise duty paid on the finished products and not on the raw H 
975 
976 
SUPREME COURT REPORTS [1992) SUPP. 1 S.C.R. 
A material going into the manufacture of finished products and, therefore, 
the claim had to he restricted to the actual amount of duty paid at the time 
or clearance or the finished products from the factories for export. 
In the appeals before this court on behalf of the appellants it was 
contended that though excise duty at the rate of Rs. 120 per metric ton was 
B paid_ on M.S. Flats at the time of the clearance from the factory, the 
effective rate of duty on the goods exported was Rs. 450 per metric ton, as 
duty at the rate of Rs. 330 per metric ton had been paid on the billets at 
the time of actual clearance of the billets from the producing factories, and 
that since the billets, which went into the manufacture of finished goods 
C exported, had been purchased from the major steel plants, excise duty 
should be deemed to have been paid, and that the word 'paid' in the 
expression 'the duty paid on excisable goods' should not be given 
restricted meaning and may be treated as a reference to whole duty paid 
by them on raw material and finished products. 
D 
Dismissing the appeals, this Court, 
HELD: 1.1. The billets and fiats fall under two entJies in Item 26AA 
of the First Schedule to the Central Excises and Salt Act, 1944 and 
different rates are also provided. From Rule 12 and the Notification 197 /62 
E dated 17.11.1962 issued thereunder, it is clear that the rebate is with 
respect to the duty 'paid on the excisable goods' exported and to the extent 
of the duty actually paid at the time of clearance of those goods from the 
factory. The finished product, which was exported, is a distinct and 
separate excisable product from that of billets (raw meterial) used in the 
manufacture of the same. The rebate is with reference to the actual amount 
F of the duty paid at the time of clearance of the finished products from the 
factory for export. [980-H; 981 A-El 
1.2. The meaning given for the word 'paid' in Rule 10 bas no applica-
tion in interpreting the words 'duty paid on excisable goods' in Rule 12. 
Rule 10 deals with 'short levy", whereas Rule 12, deals with rebate on duty 
G paid. There cannot be any duty when the duty has not been paid. 
[981-H; 982-A] 
N.B. Sanjana, Asstt. Collector of Central &cise v. The Elpinstone 
Spinning & Weaving Mills Ltd., (1978) 2 E.L.T. 399, distinguished. 
H 
1.3. In the absence of any notification under Rule 12(A), which 
'i
STEEL ROLLING MILLS v. U.0.1. [RAMASWAMI,J.] 
977 
relates to rebate of duty on excisable

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