Prabhu Shanker Mishra, J.

1. A learned single Judge of this Court has referred these two cases to a Division Bench recording in his order, "I consider that the questions involved are of great significance and considerable importance." Except differing in a few descriptions and details about payment of the excise duty, these two cases involve common questions for determination. They have, accordingly, been heard by us one after the other and are being disposed of by this common judgment.

2. The petitioner in C.W.J.C. No. 337 of 1981 (R), namely, Tata Yodogawa Limited, Jamshedpur (hereinafter to be called as "Tayo") owns a factory at Adityapur in the city of Jamshedpur where ingots are manufactured out of the scraps received from the main works of the Tata Iron and Steel Company Limited (hereinafter described as "Tisco"), the petitioner in C.W.J.C. No. 338 of 1981 (R). They received the scraps under an agreement to convert the scraps belonging to the Tisco into steel ingots in which agreement the scraps as well as ingots remain the property of Tisco. The Tisco which obtain the scraps in their main works which is an integrated steel plant and admittedly the scraps fulfil the description of "fresh unused steel melting scrap" (hereinafter referred to as "the scraps") also convert scraps into ingots in one of their subsidiaries and from ingots received from Tayo and ingots produced by them, they manufacture various kinds of products like billets, blooms, etc. Besides receiving scraps from Tisco, Tayo also purchase scraps to make ingots for sale to other parties.

3. It is not in dispute that ingots produced by the petitioners answer the description of goods in item no. 26 of the First Schedule to the Central Excises and Salt Act, 1944 (hereinafter referred to as "the Act") and excise duty is leviable on the ingots at the rate specified therein. The Central Government exercising its powers conferred by sub-rule (1) of the Central Excise Rules, 1944 (hereinafter to be called as "the Rule") issued Notification No. 66 of 1973-C.E., dated 1-3-1973 (Annexure-1) exempting steel ingots falling under item no. 26 of the First Schedule to the Act from the whole of the duty of excise leviable thereon provided that: -

"(a) all such ingots are manufactured exclusively from fresh unused steel melting scrap on which the appropriate duty of excise leviable under the aforesaid item no. 26 of the said First Schedule has already been paid;

(b) no set off or proforma credit has been availed of in respect of the duty paid on such steel melting scrap used in the manufacture of steel ingots."

It issued yet another Notification No. 150 of 1977-C.E. dated 18-6-1977 in exercise of the powers conferred by the said sub-rule exempting fresh unused, steel melting scraps of the types commonly known as (i) skull scraps, (ii) broken ingot moulds, (iii) butts and shorts, (iv) mould splashings which arise in steel melting shops, and (v) turnings and borings, falling under item no. 26 of the First Schedule to the Act from the whole of the duty of excise leviable thereon provided that: -

"(a) such fresh unused steel melting scrap is cleared direct from an integrated steel plant and it is proved to the satisfaction of an Officer not below the rank of an Assistant Collector of Central Excises that such scrap is intended to be used as melting scrap in the manufacture of steel ingots or semi-finished steel, as the case may be, by a manufacturer manufacturing such ingots or semi finished steel with the aid of electric furance, and

(b) the procedure set out in Chapter X of the Central Excise Rules, is follows."

4. Tisco who are liable to pay the excise duty on their steel products, do not dispute their liability to pay such duty in respect of the products which fall under item no. 26-AA of the First Schedule of the Act, but they refer to a notification issued by the Central Government vide Notification No. 152 of 1977-C.E., dated 18-6-1977, which says that the Central