PAWAN ENGG. WORKS Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) Appellants filed this appeal against the adjudication order passed by the Commissioner of Central Excise. The Commissioner of Central Excise confirmed the demand of Rs. 6,18,77,325/ - on flat rolled products of alloy steel and demand of Rs. 64,36,765/ - on the steel scrap. A penalty of Rs. 6,18,77,325/ - was also imposed under Rule 173Q of the Central Excise Rules.

(2.) Brief facts of the case are that the appellants are engaged in the manufacture of agricultural discs for agricultural harrows and clearing the same under exemption notification without payment of duty. A show cause notice was issued to the appellants for demand of duty on flat rolled product of alloy steel, which is an intermediate product on the ground that as the final product is exempt from duty, the appellants are liable to pay duty at this stage. The benefit of Notification No. 89/95 -C.E., dated 18 -5 -95 was also denied in respect of scrap on the ground that the appellants were clearing the scrap arising out of excisable as well as non -excisable products.

(3.) The contention of the appellants is that flat rolled products are manufactured out of the duty paid steel ingots. The ingots and billets were cut into pieces and after heating the same in a furnace these are rolled in a cross -section in a rolling mill. These products are non -rectangular cross section of irregular shape and are not marketable as such. The contention of the appellants is also that the onus is on the revenue to show that these intermediate products are marketable as such.