V.P. Gulati, Member (T)

1. These appeals are from the Collectors of Central Excise, Chandigarh and Jabalpur against the order of the Collector of Central Excise (Appeals), New Delhi.

2. Brief facts of the case are that the respondents are engaged in the manufacture of steel ingots out of iron and steel melting scrap with the aid of electric arc furnace and during the manufacture of the goods, runners and risers are also produced and these had been cleared by the respondents without payment of duty or at concession rate of duty in terms of notification No. 237/75 as amended and by notification No. 235/77, or by notification No. 156/79 and 53/80 as the case may be. The demand in respect of clearance of these runners and risers raised by the Department under the ground that benefit of the notification was available only in respect of ingots and not for clearance of runners and risers which have been described by the Department as steel melting scrap. These runners and risers are put to various uses after clearance. The Department alleged that the respondents had not declared in the classification list filed by them that they were also producing runners and risers. Show cause notices were issued demanding duty and contravention of provision of Rule 9(1), 173B, 173B, 173E and 173G read with Rule 226 was indicated and duty was demanded under proviso to rule 10A. The respondents resisted the demand and pleaded that runners and risers should be treated as ingots in as much as the term ingot had not been defined and runners and risers being the first solidification stage of molten metal, is fit for subsequent hot working. According to them, the runners and risers were nothing but inferior type of ingots. They pleaded that they had all along paid duty and cleared the runners and risers in terms of notification No. 237/75 and 112/77 at the rate applicable to ingots and in terms of notification 235/77 under which duty was withdrawn subject to fulfilment of conditions set out in the notification. Duty on runners and risers should also be construed to have been withdrawn. It has been pleaded that this was the interpretation placed by the Department on this notification and this is how it was understood by Industry throughout India and any demand of duty would be discriminatory in nature as in most of the Collectorates no duty on runners and risers had been charged. In this background, it was pleaded that the departmental officers were also aware of the position and after the notification 235/77, no duty was demanded. The plea of time bar was also taken. In appeal they also cited the order of the Government of India passed in Revision No. 78/82 dated 27.1.82 in the case of Century Iron and Steels Limited : 1982 ELT 761. Pointed attention was drawn to para 4 of the said order in which the Government of India referred to another order passed-in-revision, have observed as under:

"In earlier order No. 114-115/75, in another case the Government had already held that when the ingots were exempted under notification No. 237/75, it would not be reasonable to deny the exemption to the steel melting scrap including runners and risers generated along with the ingots in process of its manufacture from old iron or steel melting scrap specifically when item 26 of the Central Excise Tariff covers both ingots and steel melting scrap for the tariff entry reads as 'steel ingots including steel melting scrap'."

Adopting the ratio of the Government of India decision, the Appellate Collector allowed the appeals of the appellant. It is against the order of the Collector of Central Excise (Appeals) that the Collector has come up in appeal. In the ground of appeal following two grounds have been taken by Collector:

(1) The impugned order of Collector (Appeals) Central Excise, New Delhi is not legal, proper and correct as notification No. 237/75 dated 9.12.75 as amended by notifications No. 235/77 dated 15.7.77 exempts only steel ingots from payment of duty and bene