V.K. Agrawal, Member (T)
1. In this appeal filed by M/s. Pepsu Steel Rolling Mills the issue involved is whether the benefit of Notification No. 49/97 is available to the waste and scrap arising in the course of manufacture of their final product liable to Central Excise duty under Section 3A of the Central Excise Act.
2. Shri Balbir Singh, learned Advocate, submitted that the Commissioner (Appeals) has disallowed the benefit of Notification No. 49/97 and has confirmed the demand of duty holding that Miss-Rolls which have arisen in the course of manufacture of Hot Re-rolled product of iron and steel are not waste and scrap which is classifiable under Heading 72.04 of the Schedule to the Central Excise Tariff Act; that the Commissioner (Appeals) has, further, observed that Miss-rolls arisen during the manufacturing of Re-rolled products are in the form of waste/scrap and are not usable as finished goods; that these impugned products arise in the process due to sudden stoppage of process on account of breakdown of machinery or fluctuation in power supply, etc.; that therefore, Miss-rolls are not classifiable under Heading 7209.90; that as Miss-rolls are nothing but waste and scrap, Notification No. 49/97 is squarely applicable to them. The learned Advocate finally submitted that Notification No. 49/97 nowhere specifies waste and scrap to be classified under Heading 72.04 only; that in other words waste and scrap arisen in any stage during the manufacturing process is covered by the exemption. He relied upon the decision in the case of CCE, Chandigarh v. K.C. Alloys & Steel Castings, 2001 (130) E.L.T. 169 (Tribunal).
3. Countering the arguments Shri P.M. Rao, learned D.R., reiterated the findings as contained in the impugned Order.
4. We have considered the submissions of both the sides. Notification No. 49/97-C.E., dated 1-8-1997 exempts waste and scrap falling under the Schedule to the Central Excise Tariff Act, arisen during the course of manufacture of Hot Re-rolled products of Non-alloy steel falling under specified subheading of the Central Excise Tariff in a Hot Re-rolling mill on which duty of Excise is paid under Section 3A of the Central Excise. It is not in dispute that Miss-roll had arisen during the course of manufacturing of Hot Re-rolled product on which duty of Excise is paid under Section 3A of the Central Excise Act. The very fact that the impugned product is known as Miss-roll suggests that the product is not usable as rolls. No material has been brought on record by the Revenue to show that the Miss-rolls are usable as rolls. We, therefore, find force in the submissions of the learned Advocate that the Miss-rolls are nothing but waste and scrap which have arisen in the course of manufacture of Hot Re-rolled products of Non-alloy steel on which duty of Excise is paid under Section 3A of the Act. Accordingly the benefit of exemption cannot be denied to such Miss-rolls as they squarely fall within the ambit of Notification No. 49/97-C.E. The Tribunal has considered the applicability of the said notification in respect of runners and risers arisen in the course of manufacture of ingots in an Induction furnace unit in the case of M/s. K.C. Alloys & Steel Castings (supra). It has been held by the Tribunal that the notification does not mention Heading 72.04 after referring to waste and scrap. The scope of waste and scrap mentioned in the notification is wide enough to cover all waste and scrap falling under the Schedule to the Central Excise Tariff Act. The Tribunal further held that “even if runners and risers are treated as re-rollable scrap, falling under Heading 72.06 of the Tariff………..the exemption provided under notification cannot be denied as the exemption is not restricted to waste and scrap falling under Heading 72.04 only”. The Tribunal in the said decision has also referred to Circular No. 327/43/97-C.E., dated 1-8-1997 wherein it was mentioned as under :-
“It has been decided to exempt waste and scrap arising in the course of manufacture of ingots and billets (in the case of Induction furnace) as also the waste and scrap arising in the course of production or manufacture of Hot re-rolled products (in the case of Hot re-rolling mills), from whole of Excise duty. The Notification No. 49/97-CE refers.”
5. Thus we set aside the impugned Order and allow the appeal.