POONA ROLLING MILLS Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) In this Appeal filed by M/s. Poona Rolling Mills, remanded by the Supreme Court [2003 (158) E.L.T. 558 (S.C.)], the issue involved is whether the M.S. Round bars manufactured by them are eligible for exemption under Notification No. 208/83 -C.E., dated 1 -8 -1983.

(2.) Ms. Nisha Bagchi, learned Advocate, submitted that the Appellants manufacture M.S. Round Bars out of used and old re -rollable cut pieces of bars, plates, angles, etc. purchased by them from open market or directly from the manufacturers or ship breakers; that the said materials have always been deemed to be duty paid and avail exemption from payment of duty on their final products under Notification No. 208/83 -C.E.; that a show cause notice dated 12 -7 -85 was issued to them for imposing penalty alleging that they had not obtained Central Excise Licence and had cleared the goods without payment of duty during the period from 1 -8 -1983 to 8 -7 -1985; that thereafter a corrigendum dated 9 -10 -1985 was issued to the show cause notice wherein the duty amounting to Rs. 9,56,806.02 p was quantified to be payable by them; that by another corrigendum dated 28 -11 -1986 suppression of facts had been alleged; that another show cause notice dated 18 -12 -1987 was issued to them by the Collector, Central Excise widening the scope of the notice dated 12 -7 -85 in as much as it was alleged in showcause notice dated 18 -12 -87 that the angles, shapes, channels etc. used by them were classifiable under Heading 72.03 of the Schedule to the Central Excise Tariff Act, and scrap and plates under Heading 72.12; that in the show cause notice dated 18 -12 -87 duty was demanded for the period from 9 -7 -85 to 10 -3 -1987; that the Commissioner under the Impugned Order No. 99/1988, dated 12 -4 -1988 con firmed the demand of duty under both the show cause notices but did not impose any penalty as no mala fide had been brought to light.

(3.) The learned Advocate, further, submitted that the Appellants are entitled to exemption under Notification No. 208/83 -C.E. as they are manufacturing M S Round bars out of materials falling under Heading 72.10 of the Tariff; that the inputs used by them are not scrap as the same are re -rollable; that in re -rolling process, the inputs are heated by which they become red hot and do not lose their identity as angle, channel, etc.; that then the inputs are passed through rollers for getting desired shape and dimension; that the Pune Collectorate in its Trade Notice No. 147/1983, dated 25 -7 -83 has clearly mentioned that no distinction needs be made between fresh unused items and old and used items for the purpose of Notification No. 208/83 -C.E.; old and used items should also be considered to be inputs and deemed to be duty paid for the purpose of the notification so long as their physical characteristics render them classifiable under any of the sub -items mentioned under column No. 2 of the Table annexed to the said Notification; that "it is further clarified to the trade that old and used and unserviceable rails which are purchased by re -rollers for cutting and rolling into various other products, would fall under sub -item (11) of the new Item 25 and hence the same may be treated as inputs for the purpose of the above said notification."