Double excise levy on steel strips rejected where cold-rolled strips remained within the same tariff description.

Cold-rolled steel strips that had already suffered central excise duty as hot-rolled strips were not liable to a second levy under Item 26AA(iii) merely because of further processing. The same tariff description continued to govern both forms of strips, and the fact that they appeared in different rate entries did not create a fresh duty burden on the same goods. On that basis, the excise demand, confiscation and penalty were held unsustainable and were set aside, with amounts paid pursuant to the order directed to be refunded.

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Issues: Whether cold-rolled steel strips, already subjected to duty as hot-rolled strips, could again be made liable to central excise duty under Item 26AA(iii) of the First Schedule to the Central Excises and Salt Act, 1944.

Analysis: The decisive consideration was that both hot-rolled and cold-rolled strips remained within the same tariff category of strips. The fact that the tariff and the exemption notification treated hot-rolled and cold-rolled strips as different entries for rate purposes did not authorise a second levy on the same commodity when it had already borne the strip duty at the earlier stage. Liability to duty depended on the tariff classification and the legal incidence of the charge, not merely on whether the market regarded the processed product as different. A process that does not take the article out of the same tariff description cannot create a fresh duty burden on the very same goods.

Conclusion: The cold-rolled strips were not liable to be charged duty again merely because they had been cold-rolled from duty-paid hot-rolled strips; the demand, confiscation and penalty were unsustainable and were set aside.

Final Conclusion: The assessee succeeded, and the impugned excise demand and consequential penal action were quashed with refund of amounts paid pursuant to the order.

Ratio Decidendi: Where goods remain within the same tariff description and have already suffered duty as such goods, a further process that does not take them out of that description does not attract a second levy of central excise duty on the same product.

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