Judgment

RAY, C. J.:- These appeals are by certificate from the judgment D/- 18 April, 1969 of the High Court of Patna.

2. The High Court quashed the orders of the Revenue Authorities dated 7 July, 1967.

3. The appellants claimed before the Revenue Authority exemption from the payment of duty in respect of duty-paid pig iron which was used in the making of steel ingots.

4. The respondents manufactures iron and steel products. The respondent manufactures ingot moulds and bottom stools from big iron for use in steel melting shops. The respondent pays Central excise duty on such ingot moulds and bottom stools in accordance with the provisions contained in Section 3 of the Central Excises and Salt Act, 1944 hereinafter referred to as the Act.

5. Section 3 of the Act is the charging section. Section 3 states that there shall be levied and collected in such manner as may be prescribed duties of excise on all excisable goods other than salt which are produced or manufactured at the rates set forth in the First Schedule.

6. Prior to the Finance Act, 1964 Items Nos. 25 and 26 in the First Schedule to the Act mentioned pig iron and steel ingot respectively as the description of goods subject to excise duty.

7. As a result of the Finance Act, 1964 Items Nos. 25 and 26 were substituted by the following:-

Item No. Description of Goods Rate of Duty

25 Iron in any crude form including pig iron, scrap iron, molten iron or iron cast in any other shape or size. Rs. 45 per metric ton.

26 Steel ingots including steel melting scrap Rs. 55 per metric ton.

8. The respondent s case before the Revenue Authorities and also in the High Court in short was this: When ingot moulds and bottom stools become unfit for further use these are scrapped into pieces and remelted in the respondent s steel melting shops in the respondent s steel melting shops in an admixture with other non-duty paid scraps and hot metal in the manufacture of steel ingots. The respondent claimed a setoff of duty to the extent of duty-paid on pig iron being the remelted scrap used in the manufacture of steel ingots.

9. The respondent based the claim for exemption on Notification No. 30/60 dated 1 March. 1960 issued by the Central Government in terms of Rule 8 (1) of the Central Excise Rules, 1944 (hereinafter called the Rules) exempting steel ingots in which duty-paid pig iron is used from so much of the duty leviable thereon as is in excess of Rs. 30/- per ton. By notification No. 120 of 1960 dated 1 October, 1960 Notification No. 30/60 was amended by substituting the figures and words "Rs. 29.35 per metric ton" for the words "Rs. 30 per ton."

10. By notification No. 75/62 dated 24 April, 1962 the Central Government in exercise of powers conferred by Rule 8 (1) of the Rules exempted steel ingots falling under Item 26 of the First Schedule to the 601 Act and specified in Column 2 of the table appended to the notification from so much of the duty of excise leviable thereon as in excess of duty specified in the corresponding entry in Column 2 of the said table. In column 2 of the said notification the following descriptions and duty appear:

S. No. Descriptions Duty

1. If produced out of scrap obtained from duty paid pig iron. Rs. 30 per M. T.

2. If produced out of old iron or steel scrap or scrap obtained form duty paid steel ingots or products (75/62) Nil

11. The rates given in these aforesaid notifications were further amended by Notification No. 22 of 1964 issued on 1 March 1964, The rates in respect of Notification No. 30/60 dated 1 March, 1960 for the words and figures "Rs. 29.35 per metric ton" the words and figures substituted were "Rs. 20/- per ton."

12. Duty was realised from the respondent on steel ingots in the making of which duty-paid pig iron of rejected ingot moulds and bottom stools were used along with non-duty paid materials. The respondent claimed exemption in respect of duty-paid pig iron on rejected moulds and bottom stools used in the making of steel ingots. The claim of the r