RATHI SUPER STEELS LTD. Vs. CCE

JUDGEMENT

(1.) The issue involved in this appeal, filed by M/s. Rathi Super Steels Ltd., is whether the Central Excise duty is payable by them on misrolls, which are obtained during the course of manufacture of bars and rods by them.

(2.) Shri M. Chandersekharan, learned Sr. Advocate, submitted that the appellants manufacture bars and rods and during the relevant period were discharging their duty liability under Compounded Levy Scheme as per the provisions of Section 3A of the Central Excise Act read with Rule 96ZP of the Central Excise Rules; that during the course of manufacture of bars and rods, there arise misroll and waste and scrap; that the Department has demanded the duty on the quantity of misrolls for the period from October 1997 to March 2000 under the show cause notice dated 3.10.2002 on the ground that the benefit of Notification No. 67/95 was not applicable as the final products were subject to duty under the Compounded Levy Scheme. The learned Sr. Advocate, further, submitted that the entire demand of duty is hit by the time limit specified in Section 11A of the Central Excise Act as the extended period of limitation is not invocable; that the fact of misrolls, arisen during the course of manufacture of final product, was known to the Department as they had filed R.T. 12 return for the month of September 1997 in which they had clearly mentioned misrolls and they had also filed a declaration in lieu of classification list under their letter dated 4.8.97 in which they had specifically claimed the benefit of Notification No. 67/95 dated 16.3.95 in respect of misrolls obtained by hot rolling for captive consumption for the manufacture of iron and steel products; that in their reply to the show cause notice, the appellants had specifically referred to the said declaration filed with the Department; that, therefore, finding of the Commissioner, in the impugned order that they had never disclosed to the Department about claiming the benefit of Notification, is not correct.

(3.) Countering the arguments, Shri Virag Gupta, learned DR, submitted that the extended period of limitation is invocable in the facts and circumstances of the present matter as the appellants had never disclosed to the Department, during the period of October 1997 to March 2000, about the manufacturing of misrolls in their factory and captively using them in the manufacture of bars and rods; that they had also not disclosed to the Department that they were going to avail of the benefit of Notification 67/95 -CE dated 16.3.95 in respect of misrolls; that the Department came to know all the details only when they directed the appellants to submit the details of production, clearance, value, etc. of misrolls used captively.