LUCKY STEEL INDUSTRIES Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) The appellants are engaged in the manufacture of rolled products such as bars, rods of iron arid non -alloy steel, round bars, CTD bars etc. These goods are presently classifiable under Chapter Heading 72.09 of the Schedule to the Central Excise Tariff Act, 1985. Prior to 1986 they were classified under Tariff Item 25 of the first Schedule to the Old Tariff Act. These goods are manufactured from re -reliable materials from ship breaking and from open market. The issue raised in these Appeals is whether the appellants are entitled to exemption under Notification No. 208/83 -CE., dated 1 -8 -83 as amended. The Appeals are directed against the findings of the Collector that the appellants are not entitled to the benefit of the notification.

(2.) Apart from the submissions on merits, the appellants contended before us that the Department has wrongly invoked the extended period of limitation in their case and that the demand is barred by limitation. In the case of M/s. Steel Rolling Mill the demand is for the period 1 -8 -83 to 31 -8 -87 and in the case of M/s. Lucky Steel Industries the period is from 26 -9 -84 to 31 -8 -87. The show cause notice in the first case is dated 26 -7 -88 and in the second case dated 14/16 -8 -89, It is contended on behalf of the appellant that Department was aware of the manufacturing activity carried on by the appellants during the relevant period; that in the year 1981 the issue of the appellants taking licence under the Central Excise Act was raised but was dropped on the basis of the representation submitted by their association; that statements under Section 14 of the Central Excise Act were taken from the partners of the Steel Rolling Mill of Saurashtra on 16 -12 -86, 19 -5 -87 and 13 -1 -88 wherein they had admitted the fact of manufacturing rolled products from ship breaking material and also from the scrap purchased from open market and that they have not obtained Central Excise licence during the relevant period. The statements had been taken from the partners of Lucky Steel Industries on 26 -2 -87, 21 -5 -87, 27 -1 -88, 14 -6 -88 and 4 -7 -89, which contained similar admission. While some gate passes showed nil rate of duty, other documents showed payment of duty at appropriate rates, and that the Department was well aware of the fact that the appellants were taking the benefit of the provisions contained under Notification No. 208/83 -CE. Under these circumstances, appellants would submit that there was no justification in taking recourse to the extended period in their case.

(3.) The appellants would further contend that prior to March, 1986 when the old Tariff Act was in force, there was no distinction between re -rollable scrap/material obtained from ship breaking and from any other source. With the enactment of the new Tariff Act, 1985, a distinction for the first time was drawn in re -rolling material on the basis of the source from which it was obtained (obtained from ship breaking).