1991 (6) TMI 127

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....mpt from central excise duty in excess of Rs. 200/- per MT in terms of Notification No. 53/80 dated 13-5-1980. This concession was subject to the condition that ingots were manufactured out of raw materials specified in the notification. The appellants claimed that during the period 1-4-1981 to 30-9-1982 they received 273.273 MT of defective steel ingots out of which they produced after remelting 240.636 MT of ingots. The Assistant Collector issued a show cause notice on 20th May, 1983 seeking to recover differential duty at Rs. 130/- per MT on the ground that defective steel ingots not being one of the specified raw materials the benefit of concessional rate of duty at Rs. 200/- per MT in terms of Notification No. 53/80-C.E., dated 13-5-19....

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....e learned JDR, Shri Sohal argued that the process of recasting of defective ingots after melting would constitute manufacture since the defective ingots lose their identity and are transformed into an altogether new product. He contended that the case law cited on behalf of the appellants was not relevant since in those cases the items which were worked upon even after processing were not transformed into any new product. He added that the appellants' claim that defective steel ingots could be deemed as steel melting scrap was also devoid of any force. He contended that in the absence of any evidence to the effect that the ingots used by the appellants for remelting were defective to such extent so as to be unfit for any other use, ingots i....

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.... any use other than melting for retrival of metal. Had the ingots used by the appellants for melting been usable for any other purpose such as re-rolling on account of the defects being minor, it would not have been prudent on the part of the appellants to melt them for recasting. We, therefore, accept the appellants' claim that the steel ingots produced by them out of defective ingots could be deemed as having been produced out of "steel melting scrap" entitling them to the concession under Notification No. 53/80. 6. The alternative plea advanced by the appellants is that they were not liable to pay the duty demanded since remaking of defective ingots into ingots after melting and recasting did not amount to manufacture. In support of the....