Exemption for runners and risers in steel ingot manufacture upheld under the earlier notification despite a later exemption instrument.

Runners and risers generated in the manufacture of steel ingots were treated as falling within the exemption for steel ingots under Notification No. 237 of 75, because the tariff entry covered steel ingots including steel melting scrap and the exemption scheme was read to extend to scrap integrally arising in manufacture. Notification No. 16 of 79 was not treated as a basis to withdraw that earlier exemption or levy duty on the same goods for the prior period. The appellate order was set aside and the revision was allowed on the basis that the disputed clearances remained covered by the earlier exemption.

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Issues: Whether runners and risers arising during manufacture of steel ingots were entitled to exemption under Notification No. 237 of 75 and whether Notification No. 16 of 79 could be construed to deny that exemption for the earlier period.

Analysis: The Government treated steel ingots and steel melting scrap as covered by Item 26 of the Central Excise Tariff, which expressly embraces steel ingots including steel melting scrap. It followed the earlier departmental view that where ingots are exempt under Notification No. 237 of 75, it would be unreasonable to deny the same benefit to steel melting scrap, including runners and risers, generated in the course of their manufacture. Notification No. 16 of 79 was read as having a wider scope in relation to runners and risers and could not be used to impose duty on goods already exempted under Notification No. 237 of 75.

Conclusion: Runners and risers generated in the manufacture of steel ingots were held entitled to exemption under Notification No. 237 of 75, and Notification No. 16 of 79 did not justify levy of duty on such goods for the earlier period.

Final Conclusion: The impugned appellate order was set aside and the revision application was allowed on the ground that the disputed clearances were covered by the earlier exemption.

Ratio Decidendi: An exemption granted to steel ingots cannot be denied to scrap, runners and risers integrally generated in their manufacture where the tariff entry and the exemption scheme indicate coverage of both forms of goods, and a later notification cannot be used to impose duty on goods already exempted.

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