ORDER
Lajja Ram, Member (T)
1. In this appeal filed by M/s. Ferro Alloys Corporation Ltd., Nagpur, (hereinafter referred to as ‘FACT’), the matter relates to the classification of the products known as iron and steel runners and risers, during the period from 1-8-1983, after the introduction of the revised Tariff Entry No. 25 in the erstwhile Central Excise Tariff in force prior to 28-2-1986 (hereinafter referred to as the ‘Tariff’). The FACT had classified the runners and risers under sub-item (6)(iii) of Item No. 25 of the Tariff under their classification effective from 17-3-1985. The Assistant Collector of Central Excise, Nagpur, was of the view that the goods in question were classifiable as waste and scrap of steel under sub-item (3)(ii) of the said Item No. 25 of the Tariff. On appeal, the Collector of Central Excise (Appeals), Bombay, held that the runners and risers were in the nature of melting scrap and were correctly classifiable under sub-item (3)(ii) of Item No. 25 of the Tariff.
2. The matter was posted for hearing on 14-11-1996. The appellants had prayed for decision on merits, without their personal presence. On behalf of the respondents/Revenue, Shri K.K. Jha, SDR, reiterated the findings of the Collector of Central Excise (Appeals), Bombay.
3. We have carefully considered the matter. The issue for our consideration in this appeal is the classification of the products known as runners and risers. The appellants had claimed the assessment of such runners and risers under sub-item (6)(iii) of Item No. 25 which during the relevant time read as under:
“(6) Puddled bars, pilings, ingots, blocks, lumps and similar forms of iron or steel –
(i) puddled bars and pilings of iron.
(ii) ingots, blocks, lumps and similar forms of steel.
(iii) not elsewhere specified.”
The Assistant Collector of Central Excise, Nagpur, after hearing the FACT and examining their written submissions observed that runners and risers could not be equated with re-rollable scrap, were steel melting scrap and were classifiable under sub-item (3)(ii) of Item No. 25 which during the relevant time read as under:
“(3) Waste and Scrap
(i) of iron
(ii) of steel”
Waste and scrap had been defined, as waste and scrap of iron or steel fit only for the recovery of metal or for use in the manufacture of chemicals, but did not include slag, ash and other residues.
4. In the course of manufacture of steel ingots, slabs, etc., the FACT got solidified metal material of indefinite shape and of varying length. These were sold to re-rollers who roll various products from such material. They were fit for rolling by the rolling mills. Where the material was not suitable for rolling and was fit only for the recovery of metal, it was classified by the appellants as waste and scrap, and there is no dispute about the classification of such material classified by the appellants themselves as waste and scrap.
5. Steel melting scrap is that material which arise unavoidably during the course of steel making, castings and finishing operations of the various products produced out of molten metal. It may include such items as pit scrap, ingots too short to roll, rejected ingots, ingot crops, crop ends from blooms and billets, etc. Such scrap may be used for re-rolling or for re-melting for bringing out raw material to be used for producing finished products, Scrap in the form of iron or steel is one of the two principal sources of metallics in steel making; the other principal source is iron from the blast furnaces, either molten as it comes from the blast furnace (hot metal) or in solid pig form. Runners and risers also arise during the course of steel castings and are covered by the broad description of steel melting scrap.
6. Runners as iron or steel material are solidified molten metal in refractory channel leading to casting or ingot mould. They are formed in runner channel. The riser as iron or steel material is also solidified molten metal that remains in the riser block/box or cavity attached to the casting after the molten metal as required by the casting (because of shrinkage before and during solidification) had been provided. In the riser molten metal is left as a reservoir to compensate for the volume decrease so that shrinkage cavities do not develop in the locations of the casting that solidify last.
7. Runner is a channel along which molten metal runs from the furnace to the mould in foundries. It is located in the cast house covering iron trough Slag skimmer and iron runner. The molten metal continues to flow down the main runner from which it is diverted at intervals into the iron ladles, the control of this operation being accomplished by gates or shutters located in the runners. When the preparations for the next cast begins, the runners are required to be cleaned of both metal and slag. Riser is an opening in a mould through which molten metal can flow. They are attached to the pattern. The size and shape of the casting are the controling factors in deciding how the molten steel should be introduced into the mould and where to locate the gates, risers and vents. A flask is selected which is sufficiently larger than the pattern to provide room between the pattern and the flask well to accommodate at least several inches of sand and the gate system. The flask also has to be sufficiently large to permit placement of the feed heads or risers which are attached to the pattern and leave spaces in the finished mould to serve as reservoirs for molten metal that supply extra metal to feed the voids formed by shrinkage as the metal cools and passes from the liquid to the solid state. All risers had to be removed prior to the removal of the cast. They are generally removed by sledge hammers; oxyacetylene torches are used to remove conventional risers. Carbon arc air process is also used.
8. The Revenue had sought to classify such runners and risers under sub-item (3) of Item No. 25 as waste and scrap. As we have referred to above, the waste and scrap for the purposes of sub-item (3) is such waste and scrap of iron or steel which is fit only for recovery of metal or for use in the manufacture of chemicals. The runners and risers are usable both for recovery of metal and for rolling. The material which was fit only for the recovery of metal had already been classified by the appellants as waste and scrap for the purposes of sub-item (3) of Item No. 25 and there is no dispute with regard to such material. The runners and risers which were suitable for rolling could not be classified under sub-item (3) of Item No. 25. The term waste and scrap refers to the scrap ferrous materials for the recovery of metal by re-melting with or without new pig iron. Such material generally takes the form of (i) waste and scrap resulting from the cutting, shaping or other mechanical working of iron and steel (e.g. crop ends, fillings and turnings); (ii) unusable worn out and broken articles or iron or steel frequently crushed or compressed goods. The broken pieces of pig iron are excluded from the purview of waste and scrap.
9. In view of the above, the runners and risers which were fit for rolling could not be classified under sub-item (3) of Item No. 25.
10. The appellants had claimed the classification of their runners and risers under sub-item (6) of Item No. 25 which covered puddled bars, pilings, ingots, blocks, lumps and similar forms of iron or steel. It is seen that this sub-item among others also covers lumps and blocks and further provides that iron and steel in other forms similar to that of puddled bars, pilings, ingots, blocks and lumps were also classifiable under that sub-item. Thus, the form for the purposes of sub-item (6) was not of much significance. Even broken pieces were- covered by this tariff entry. The runners and risers do not have any definite shape and size, but as we observed, the form is not of much significants for classification under sub-item (6) of Item No. 25, as among others, it covers also the blocks and lumps.
11. The learned Collector of Central Excise (Appeals) had admitted that the runners and risers in question could be used for rolling, but observed that by virtue of their size and nature they were essentially in the nature of melting scrap. Melting scrap is not the same as scrap for melting. The steel melting scrap refers to the origin of the material i.e. it is that scrap which arise during the course of steel melting. It is not necessarily for melting. Depending upon the form of such scrap arising during the course of melting of steel, it could be used for different purposes including rolling. We find that sub-item (6) of Item No. 25 does not cover only ingots, but is widely worded to include iron or steel in form similar to puddled bars, pilings, ingots, blocks, and lumps. He had referred to the Tribunal’s decision in the case of M/s. Ravindra Steel Ltd., Nagpur v. Collector of Central Excise, Nagpur, 1983 (12) E.L.T. 413 (Tribunal), where the Tribunal had observed that the two products, steel ingot and the steel melting scrap were not the same and were known to the trade and commerce by distinct names and nomenclatures and that the steel ingots would not include the steel melting scrap. As we have discussed above, the tariff entry under sub-item (6) of Item No. 25 not only covers ingots, but also blocks and lumps and other similar forms of iron and steel. We have also discussed above that all types of steel melting scrap is not fit only for the recovery of the metal and could be used for other purposes, such as, rolling.
12. Taking all the relevant considerations into account, we do not agree with the view taken by the learned Collector of Central Excise (Appeals), Bombay. As a result, the appeal filed by M/s. FACT is allowed.