TATA IRON & STEEL CO. LTD. versus UNION OF INDIA

Citation: [2002] SUPP. 4 S.C.R. 289 · Decided: 20-11-2002 · Supreme Court of India · Bench: S.S.M. QUADRI, ARIJIT PASAYAT · Disposal: Appeal(s) allowed

Judgment (excerpt)

TA TA IRON & STEEL CO. LTD. 
A 
v. 
UNION OF INDIA 
NOVEMBER 20, 2002 
[SYED SHAH MOHAMMED QUADRI AND ARIJIT PASA Y AT, JJ.] 
B 
Central Excise and Salt Act, 1944: 
First Schedule-Item 26- Excise duty-Steel ingots-Produced from 
steel melting scrap-Assessee claiming benefit of exemption Notification No.531 C 
64 dated 113//964-Claim neither accepted by revenue nor by High Court -
Held, cut pieces of bloon1 which were rendered into 1nelting scrap, had gone 
into making of steel ingots falling under Item No.26-So the requirement of 
the Notification to that extent is fulfilled-Assessee entitled to benefit of 
exemption under the Notification in r.egard to so 1nuch of the excise duty as D 
is proved to have been paid on such melting scrap under Item 26. 
Words and Phrases: 
'Melting scrap '-nieaning of 
Tata Iron J. Steel Co. ltd. v. Collector of Central Excise, (1995] 75 E 
E.L.T. 3, relied on. 
CIVIL APPEL LA TE JURISDICTION : Civil Appeal No. I 0577 of 
I 995. 
From the Judgment and Order dated 17.7.I986 of the Patna High F 
Court in L.P.A. No. 15 of I 986(R). 
WITH 
C.A. Nos. 10578, 10579, I0580/95 and 7682 of 1996. 
Joseph Vellapally, Rajan Narain, Amit Bhagat and Ajay Aggarwal 
for the Appellant. 
T.L.V. Iyer, N.K. Bajpai, Rajiv Nanda and B.K. Prasad for the 
Respondent. 
289 
G 
H 
290 
SUPREME COURT REPORTS [2002] SUPP. 4 S'.C.R. 
A 
The following Order of the Court was delivered: 
B 
These appeals raise a common question : whether the appellants are 
entitled to the benefit of Notification No. 53/64, dated March l, I 964, which, 
as quoted in the paperbook, reads as under: 
"Notification 
G.S.R. In exercise of the powers conferred by sub-rule (I) of Rule 8 
of the Central Excise Rules, 1944, the Central Government hereby 
exempts steel ingots falling under Item No. 26 of the First Schedule 
to the Central Excise and Salt Act, 1944 ( 1 of 1944 ), produced from 
C 
fresh unused steel melting scrap, exclusively or in admixture with 
any other material scrap, exclusively or in admixture .with any other 
material, from so much of the duty of excise as is proved to have 
been paid on such fresh unused steel melting scrap under Item No. 
26 of the schedule provided that no set off of duty has already been 
D 
availed of in respect of such scrap." 
A plain reading of the notification shows that the Central Government 
granted qualified exemption on steel ingots falling under Item No. 26 of the 
first Schedule to the Central Excise and Salt Act, 1944 (I of 1944). This 
exemption is subject to the conditions that: (I) the Steel ingots are produced 
E from fresh unused steel melting scrap, exclusively or in admixture with any 
other material scrap, (2) the fresh unused steel melting scrap: (a) should have 
suffered duty under the said Item 26 of the first Schedule and (b) no set off 
of duty has already been availed of in respect of such scrap; and (3) the 
quantum of exemption is limited to so much of the duty of excise as is 
proved to have been paid on such fresh unused steel melting scrap under 
F Item 26 of the first Schedule. 
,G 
H 
The appellants made a large claim. But the claim is confined before us 
only to exemption of steel ingots on the ground that what was used in 
manufacture of steel ingots falling under Item No. 26 of the First Schedule, 
was steel melting scrap. 
The claim of the appellants was negatived by the departmental authorities 
as well as the Central Government, on revision. On the writ petitions being 
filed by the appellants before the High Court, a learned Single Judge, held, 
inter alia. 
"It is difficult to accept the contention that cut pieces of blooms 
TATA IRON & STEEL CO. LTD. "· U.0.1. 
291 
used for the 1nanufacture of ingots would also n1erit exen1ption. Such A 
cut pieces of b\001ns do not conforn1 to the description and are entirely 
different in nature than the ingredient conte111plated under the 
notification.'· 
In our vie\v, the conclusion reached by the High Court cannot be 
sustained for two reasons. First, the revisional authority, namely, the Central B 
Government, in its order dated September 7, 1979 found, 
"Therefore, what the petitioners received back was not the sa1ne 
material in its pristine form, which the petitioner had despatched, but 
only a mutilated or truncated form of the duty-paid bloom, rendered 
into steel melting scraps." 
The High Court has not taken note of this finding. Secondly, in view of the 
judgment of this Court in the appellant's own case, tit

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