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1969 Supreme(Pat) 77
PATNA HIGH COURT
Misra and S.Wasiuddin JJ.
Tata Iron And Steel Co.Ltd.
Versus
Union Of India (Uoi)
Decided On : APRIL 18, 1969
The court held that the reduced rate of duty prescribed under Notification No. 30/60, dated 1st March, 1960, is payable in respect of steel ingots manufactured from duty-paid pig iron, and that account should be taken of the quantity of duty-paid pig iron used in the manufacture of steel ingots and to the extent of such quantity the benefit of the reduced rate prescribed under this notification should be available to the petitioner.
Headnote:
CENTRAL EXCISE - NOTIFICATION NO. 30/60 DATED 1ST MARCH, 1960 - INTERPRETATION - DUTY ON STEEL INGOTS MANUFACTURED FROM DUTY-PAID PIG IRON - WHETHER REDUCED RATE OF DUTY PRESCRIBED UNDER THE NOTIFICATION IS PAYABLE ONLY IN RESPECT OF STEEL INGOTS MANUFACTURED EXCLUSIVELY OUT OF THE DUTY-PAID PIG IRON OR ACCOUNT SHOULD BE TAKEN OF THE QUANTITY OF DUTY-PAID PIG IRON USED IN THE MANUFACTURE OF STEEL INGOTS AND TO THE EXTENT OF SUCH QUANTITY THE BENEFIT OF THE REDUCED RATE PRESCRIBED UNDER THIS NOTIFICATION SHOULD BE AVAILABLE TO THE PETITIONER.
Fact of the Case:
The petitioner manufactured steel ingots in which it also used scrap ingot moulds and bottom stools after payment of duty under item No. 25, Schedule 1, of the Central Excise Tariff. The petitioner claimed that it was liable to pay duty at the rate of Rs. 30 per metric tonne in respect of the quantity of scrap iron used as aforesaid and at the rate of Rs. 39.35 in respect of pig iron for which no duty was paid before. However, the claim was rejected by the Assistant Collector, Central Excise, Jamshedpur; the Collector, Central Excise, Patna; and the Additional Secretary, Ministry of Finance, Government of India.
Finding of the Court:
The court held that the interpretation put upon Notification No. 30/60, dated 1st March, 1960, by the revenue authorities was erroneous. The correct interpretation was that account should be taken of the quantity of duty-paid pig iron used in the manufacture of steel ingots and to the extent of such quantity the benefit of the reduced rate prescribed under this notification should be available to the petitioner.
Issues: Whether the reduced rate of duty prescribed under Notification No. 30/60, dated 1st March, 1960, is payable only in respect of steel ingots manufactured exclusively out of the duty-paid pig iron or account should be taken of the quantity of duty-paid pig iron used in the manufacture of steel ingots and to the extent of such quantity the benefit of the reduced rate prescribed under this notification should be available to the petitioner.
Ratio Decidendi: The court held that the language of the notification was ambiguous and that the department had introduced the term "only" into it, which did not occur in the notification as it stands. The court also held that the intention of the notification was to grant relief to the manufacture of steel ingots in respect of materials which were already used and that the interpretation adopted by the department would render the notification nugatory. Further, the court held that the notification was in the nature of an explanatory measure and that it was permissible to read something more into the notification to carry out the clear object and intention of the legislature.
Final Decision: The court quashed the orders passed by the revenue authorities and directed that the stand of the petitioner be accepted. The court also directed that the burden would lie on the petitioner in every case to satisfy the department by placing on record reliable material that in fact a certain quantity of scrap iron which would be liable to duty at the rate mentioned in item No. 25, Schedule I, is payable so that the department may make correct ejaculation in the light of such material.
1. These thirteen applications which have been heard together arise out of the orders passed by the Assistant collector, Central Excise, Jamshedpur, in pursuance of Notification No. 30/60 dated 1st March, 1960, made in exercise of the powers conferred by Sub-rule (1) of Rule 8 of the Central Excise Rules, 1944. The petitioner manufactured steel ingots in which it also used scrap ingot moulds and botton stools after payment of duty under item No. 25, Schedule 1, of the Central Excise Tariff. It is stated that these casting moulds become unserviceable after 55 to 60 heats. They are then scrapped and remelted for being manufactured into steel ingots. It is stated in the petition that this is done and, in the very nature of the manufacturing process, has to be done by mixing such scrap iron with non-duty-paid pig ore. In terms of this notification under item No. 25, Rs. 10 per metric tonne is the duty to be paid. Under item No. 26 steel ingots are subject to duty at the rate of Rs. 39.35 per metric tonne. The petitioners claim, which is subject-matter of all the 13 applications for various months from March, 1964, to March 1965, was that the petitioner was liable to pay duty at the rate of Rs. 30 per metric tonne in respect of the quantity of scrap iron used as aforesaid and at the rate of Rs. 39.35 in respect of pig iron for which no duty was paid before. The claim of the petitioner, however, in all the cases was rejected by the Assistant Collector, Central Excise, Jamshedpur ; and on appeal, by the Collector, Central Excise, Patna, as also by the Additional Secretary, Ministry of Finance, Government of India. The details of the claim may be stated as follows : __________________________________________________________________ C.W.J.C Period Claim No. Quantity Amount Date of order of Assistant Collector, Central Excise, Jamshedpur. Date of order of Collector, Centeral Excise, Patna with Case No. Date of order of Sri D.P. Anand, Addl. Secretary, Ministry of Finance, Govt. of India, New Delhi. __________________________________________________________________ 1 2 3 4 5 6 7 8 __________________________________________________________________ Rs. 618 March64 79 3110 M.T. 31,000 30-12-64 18 M.P. of 65 dt. 19-6-65 7-7-67 625 April64 80 5302 M.T. 1,59,060 30-12-64 22 M.P. of 65 dt. 19-6-65 621 May64 81 4703 M.T. 1,41,090 29-12-64 30 21 M.P. of 65 dt. 19-6-65 617 June64 99 2623 M.T. 78,690 19-12-64 23 M.P. of 65 dt. 19-12-65 624 July64 100 1849 M.T. 55,470 23-12-64 20 M.P. of 65 dt. 19-6-65 623 August64 106 2235-82 M.T. 67,074.60 30-3-65 31 44 M.P. of 65 dt. 19-6-65 616 September64 110 1855 M.T. 55,650.00 29-12-64 30 19 M.P. of 65 dt. 19-6-65 620 October64 115 3513-700 M.T. 1,05,411 29-4-65 48 M.P. of 65 dt. 30-7-65 626 November64 117 2654-410 M.T. 79,632.30 Do. 49 M.P. of 65 dt. 30-7-65 622 December64 119 2117-313 M.T. 63,519.39 15-4-65 19 50 M.P. of 65 dt. 30-7-65 614 January65 121 3479-427 M.T. 1,04,682.81 29-4-65 51 M.P. of 65 dt. 30-7-65 615 February65 122 2370-678 M.T. 71,120.34 Do. 52 M.P. of 65 dt. 30-7-65 619 March65 126 3153-674 M.T 94,610.22 30-6-65 53 M.P. of 65 dt. 30-7-65 __________________________________________________________________
2. Mr. Rajeshwari Prasad, appearing in support of the application, has urged that the interpretation put upon this Notification No. 30/60, dated 1st March, 1960, is erroneous. The correct interpretation should not be that the reduced rate of duty prescribed under the notification is payable only in respect of steel ingots manufactured exclusively out of the duty-paid pig iron but that account should be taken of the quantity of duty-paid pig iron used in the manufacture of steel ingots and to the extent of such quantity the benefit of the reduced rate prescribed under this notification should be available to the petitioner and that the usual rate in item No. 26 should be confined only to that quantity of pig iron in respect of which duty has not been already paid. The point involved
