# I 044 UNION OF INDIA & ORS v. TATA IRON & STEEL CO. LTD., JAlvISHEDPUR

- **Citation:** [1976] 2 S.C.R. 1044
- **Court:** Supreme Court of India
- **Decided:** 1975-12-17
- **Case number:** Civil Appeals Nos. 723-737 of 1971
- **Bench:** A. N. Ray, C.L M. H. Boo, R. S. Sarkaria, P. N. Shinghal
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/i-044-union-of-india-ors-v-tata-iron-steel-co-ltd-jalvishedpur-6694
- **Pages:** 6

## Headnote

Central Excises and Salt Act, 1944-Section 3 read with First Schedule,
items 25 C<lld 26-Notification 30/6(} dated 1st March, 1960 in terms of Rule
8 (I) of the Central Excise Rules, 1944 exempting steel ingots in which duty·
paid pig iron is used-Interpretation of the Notification-Whether exemption is
not available if duty-paid pig iron is mixed with other non-duty.paid materials.
The respondent manufactures, as part of iron and steel products, ingot moulds
and bottom stools from pig iron for use in steel melting shops.
Under item
25 and 26 and the first Schedule to the Central Excises and Salt Act, 1944, the
respondent paid excise duty leviable on "pig iron and steel ingots., respec·
lively.
In terms of Rule 8(1) of the Central Exci~ Rules,. 1944, by a notification
No. 30/ 60, the Central Government granted exemption to steel ingots falling
under item 26 of the First Schedule if produced out of scraps obtaiued from
duty-paid pig irons. Since unserviceable ingot moulds and bottom stools
are
also scrapped into pieces and remelted in an admixture with other non-duty
paid scraps and hot metal in the manufacture of steel ingot9, the respondent
claimed a set off of duty to the extent of duty paid on pig iron being the re•
melted scrap used in the manufacture of steel ingots which was rejected by the
Assistant Collector of Central Excise. The appeal before the Collector
of
Central Excise and the revision before the Ministry of Finance were dismissed,
interpreting the Notification No. 30/60 as not applicable when duty-paid pig
iron is mixed with other non-duty materials.
When the orders of the Revenue Authority were challenged in the High
Court, the High Court quashed them holding that ( i) the Revenue Authorities
fell into the error of interpreting Notification No. 30/60 by confining exemption
to steel ingots in which "entirely" "exclusively or only" duty-paid pig iron is
used since no such wor.ds were used in the Notification; and (ii) the Notification
would have to be interpreted in a manner that the statute would not cast a burden
twice ove,r the payment of tax unless the language of the statute is so compellingly certain to that effect.
Dismissing the appeal by certificate and negativing the contentions of the
appellant that the exemption is given for virgin pig iron and if pig iron was
used and thereafter reduced to s'crap, there could be no exemption in respect of
that scrap being different from pig iron and consequential refund of the dutypaid on pig iron, the Court.
HELD : (1) The only question is whether duty-paid pig iron is used along
with non-duty-paid materials. Pig iron is made out of iron ore plus limestone
plus coke.
Pig iron is melted and processed into ingot moulds and bottom
stools. Nothing is added to pig iron. When ingot moulds and bottom stools
become unserviceable they are broken. This becomes scrap and is melted and
used in the manufacture of steel ingots. All the time it is duty-paid pig iron
which is processed into ingot moulds and bottom stools and again broken into
scrap and melted in the making of steel ingots. [1048 E-F]
(2) There cannot be double taxation on the same article. The analogy of
the Revenue of the example of excise duty on motor cars, in spite of the fact
that there was duty on tyres and duty on metal sheets was misplaced. [1048 G]
(3) Notification No. 30 /60 granting exemption to duty-paid pig iron does
not say that exemption is granted only when duty-paid pig iron is used. and that
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UNION V. TATA IRON & STEEL CO. (Ray, C.J.)
1045
the exe'mption would not be available if duty-paid pig iron is mixed with other
A
non-duty-paid materials. [1048 H, 1049 A]
( 4) The object of the Notification was to grant relief by exempting dutypaid pig iron. If the intention of the Government were to exclude the exemp~
tion to duty-paid pig iron when mixed with other materials, then the Notification
would have used the expression "only" or "exclusively" or "entirely'' in regard
to duty-paid pig iron. [

## Text

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I 044
UNION OF INDIA & ORS.
v
TATA IRON & STEEL CO. LTD., JAlvISHEDPUR
December 17, 1975
[A. N. RAY, C.L M. H. Boo, R. S. SARKARIA AND
P. N. SHINGHAL, JJ.]
Central Excises and Salt Act, 1944-Section 3 read with First Schedule,
items 25 C<lld 26-Notification 30/6(} dated 1st March, 1960 in terms of Rule
8 (I) of the Central Excise Rules, 1944 exempting steel ingots in which duty·
paid pig iron is used-Interpretation of the Notification-Whether exemption is
not available if duty-paid pig iron is mixed with other non-duty.paid materials.
The respondent manufactures, as part of iron and steel products, ingot moulds
and bottom stools from pig iron for use in steel melting shops.
Under item
25 and 26 and the first Schedule to the Central Excises and Salt Act, 1944, the
respondent paid excise duty leviable on "pig iron and steel ingots., respec·
lively.
In terms of Rule 8(1) of the Central Exci~ Rules,. 1944, by a notification
No. 30/ 60, the Central Government granted exemption to steel ingots falling
under item 26 of the First Schedule if produced out of scraps obtaiued from
duty-paid pig irons. Since unserviceable ingot moulds and bottom stools
are
also scrapped into pieces and remelted in an admixture with other non-duty
paid scraps and hot metal in the manufacture of steel ingot9, the respondent
claimed a set off of duty to the extent of duty paid on pig iron being the re•
melted scrap used in the manufacture of steel ingots which was rejected by the
Assistant Collector of Central Excise. The appeal before the Collector
of
Central Excise and the revision before the Ministry of Finance were dismissed,
interpreting the Notification No. 30/60 as not applicable when duty-paid pig
iron is mixed with other non-duty materials.
When the orders of the Revenue Authority were challenged in the High
Court, the High Court quashed them holding that ( i) the Revenue Authorities
fell into the error of interpreting Notification No. 30/60 by confining exemption
to steel ingots in which "entirely" "exclusively or only" duty-paid pig iron is
used since no such wor.ds were used in the Notification; and (ii) the Notification
would have to be interpreted in a manner that the statute would not cast a burden
twice ove,r the payment of tax unless the language of the statute is so compellingly certain to that effect.
Dismissing the appeal by certificate and negativing the contentions of the
appellant that the exemption is given for virgin pig iron and if pig iron was
used and thereafter reduced to s'crap, there could be no exemption in respect of
that scrap being different from pig iron and consequential refund of the dutypaid on pig iron, the Court.
HELD : (1) The only question is whether duty-paid pig iron is used along
with non-duty-paid materials. Pig iron is made out of iron ore plus limestone
plus coke.
Pig iron is melted and processed into ingot moulds and bottom
stools. Nothing is added to pig iron. When ingot moulds and bottom stools
become unserviceable they are broken. This becomes scrap and is melted and
used in the manufacture of steel ingots. All the time it is duty-paid pig iron
which is processed into ingot moulds and bottom stools and again broken into
scrap and melted in the making of steel ingots. [1048 E-F]
(2) There cannot be double taxation on the same article. The analogy of
the Revenue of the example of excise duty on motor cars, in spite of the fact
that there was duty on tyres and duty on metal sheets was misplaced. [1048 G]
(3) Notification No. 30 /60 granting exemption to duty-paid pig iron does
not say that exemption is granted only when duty-paid pig iron is used. and that
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UNION V. TATA IRON & STEEL CO. (Ray, C.J.)
1045
the exe'mption would not be available if duty-paid pig iron is mixed with other
A
non-duty-paid materials. [1048 H, 1049 A]
( 4) The object of the Notification was to grant relief by exempting dutypaid pig iron. If the intention of the Government were to exclude the exemp~
tion to duty-paid pig iron when mixed with other materials, then the Notification
would have used the expression "only" or "exclusively" or "entirely'' in regard
to duty-paid pig iron. [1049 A-Bl
·
CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 723-737 of
1971.
From the Judgment and Order dated 18-4-1969 of the High Court
of Judicature at Patna in Civil Writ Jurisdiction Case nos. 614 to 626
of 1967.
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Shyamla Pappu, Girish Chandra and S. P. Nayar for the AppelC
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!ants.
G. S. Pathak, J. B. Dadachanji, 0. C. Mathur, R. Narain
and
A. K. Verma (Mrs.) for the Respondent.
The Judgment of the Court was delivered by
RAY, C.J.
These appeals are by certificate from the judgment
dated 18 April, 1969 of the High Court of Patna.
The High Court quashed the orders of the Revenue Authorities
dated 7 July, 1967.
The appellants claimed before the Revenue Authority exemption
from the payment of duty in respect of duty paid pig iron which was
used in the making of steel ingots.
The respondent manufactures iron and steel products.
The respondent manufactures ingot moulds and bottom stools from pig iron
for use in steel melting shops.
The respondent pays Central excise
duty on such ingot moulds and bottoms stools in accordance with the
provisions contained in section 3 of the Central Excises .and Salt Act,
1944 hereinafter referred to as the Act.
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Section 3 of the Act is the charging section.
Section 3 states that
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there shall be levied and collected in such manner as may be prescrib~
ed duties of excise on all excisable goods other than salt which are
produced or manufactured at the rates set forth in the First Schedule.
· Prior to the Finance Act 1964 Items No. 25 and 26 in the First
Schedule to the Act mentioned pig iron and steel ingot respectively as
the description of goods subject to excise duty.
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As a result of the Finance Act, 1964 Items No. 25 and 26 were
substituted by the following :-
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1046
SUi,REME COURT REPORTS
[1976] 2 S.C.R.
The respondent's case before the Revenu;? Authorised and also in
the High Court in short was this : When ingot moulds and bottom
stools become unfit for further use these are scrapped into pieces and
remelted in the respondent's steel melting shops in an admixture with
other non duty paid scraps and hot metal in the manufacture of steel
ingots.
The respondent claimed a set off of duty to the extent of duty
paid on pig iron being the remelted scrap used in the manufacture of
steel ingots.
The respondent based the claim for exemption on Notification
No. 30/60 qated 1 March, 1960 issued by the Central Government in
terms of Rule 8 ( 1) of the Central Excise Rules, 1944
(hereinafter
called the Rules) exempting steel ingots in which duty paid pig iron
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is used from so much of the duty Jeviable thereon as is in excess of
Rs. 30/- per ton.
By notification No. 120 of 1960 dated 1 October,
1960 Notification No. 30/60 was amended by substituting the figures
and words "Rs. 29.35 per metric ton" for the words "Rs. 30 per ton".
By Notification No. 75/62 dated 24 April, 1962 the Central Govermnent in exercise of powers conferred by Rule 8 ( 1) of the Rules
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exempted steel ingots falling under Item 26 of the First Schedule to
the Act and specified in Column 2 of the table appended to the notification from so much of the duty of excise leviable thereon as is in
excess of duty specified in the corresponding entry in Column 2 of the
said table.
In column 2 of the said notification the following descriptions and duty appear :
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--------------------------
SJ.
No.
Descriptions
Duty
----- ----------- -----------
l. If produced out of scrap obtained from duty
paid
pig iron 1r;; ·la .
Rs. 30 per M. T.
2. If produced out of old iron or steel scrap or scrap
obtained from duty paid steel ingots or products
(75/62)
Nil.
The rates given in these aforesaid notifications were further amended by Notification No. 22 of 1964 issued on 1 March,
1964. The
rates in respect of Notification No. 30/60 dated 1 March, 1960 for
the words and figures "Rs. 20.35 per, metric ton" the words and figures
substituted were "Rs. 20/- per ton".
Duty was realised from the respondent on steel ingots in the making
of which duty paid pig iron of rejected ingot moulds and bottom stools
was used along with non-duty paid materials.
The respondent claimed exemption in respect of duty paid pig iron on rejected moulds and
bottom stools used in the making of steel ingots.
The claim of the
respondent for exemption in respect of duty paid pig iron was rejected
by the Assistant Collector of Central excise by his order dated
29
August, 1965.
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UNION V. TATA IRON & STEEL CO. (Ray, C.J.)
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The respondent filed appeals before the Collector of Central Excise
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who by order dated 30 July, 1965 dismissed the rnspondent's appeals.
The respondent thereafter filed a revision petition before the Ministry of Finance under section 36 of the Act.
The Government by an
order dated 7 July, 1967 rejected the revision petition of the respondent.
The Government held that the respondent was not entitled to
any exemption under Notification No. 30/60 dated 1 March, 1960 because remelted scrap obtained from unserviceable casting moulds, viz.,
ingot moulds and bottom stools was used in conjunction with other
non duty paid pig iron in the manufacture of steel ingots.
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The respondent challenged the orders in the High Court;
The
High Court quashed the orders of the Revenue Authorities.
The
High Court held that the Revenue Authorities fell into the error of
interpreting Notification No. 30/60 by confining exemption to steel
ingots in which "entirely, exclusively or only" duty paid pig iron is
used.
The High Court held that the words "entirely, exclusively or
only" were not used in the notification.
The notificatlort exempted
steel ingot in which duty paid pig iron was used.
The High Court also
held that the notification would have to be interpreted in a manner that
the statute would not cast a burden twice over for payment of tax on
the tax payer unless the language of the statute is so compellingly certain to that effect.
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The appellant contended that exemption is given for virgin pig
iron and if pig iron was used and thereafter reduced to scrap there
could be no exemption in respect of scrap. It was also said on behalf
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of the appellant that scrap iron was different from pig iron, and, therefore, the refund of the duty paid on pig iron would not arise.
The appellant Government relied on Notification No. 75/62 dated
25 April, 1962 which gave exemption to steel ingots from so much of
the duty of excise leviable thereon if produced out of scrap obtained
from duty paid pig iron or if produced out of old iron or steel scrap
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or scrap obtained from duty paid steel ingots or products.
The appellant Government relied on Notification No. 75/62 dated 25 April,
1962 for two reasons.
First, it was said that the exemption in Notification No. 30/60 dated 1 March, 1960 exempting steel ingot in which
duty pig iron is used will not exempt scrap iron which is different from
pig iron.
Second, Notification No. 75/62 dated 25 April, 1962 gave
exemption to scrap iron iIJ. certain cases and when Notification No.
G:
75/62 was rescinded in 1964 no exemption could thereafter be claimed
in respect of scrap.
The respondent contended that the appellant all throughout before
the Revenue Authorities and the High Court knew and treated the case
of the respondent to be a claim for exemption of duty paid pig iron in
the manufacture of steel ingots.
In paragraphs 5, 6 and 7 of the
statement of case of the appellant it is said that the reapondent claimed
refund of the duty paid on pig iron used in ingot moulds and bottom
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1048
SUPREME COURT REPORTS
[1976] 2 s.c.R.
stools being the melted scrap in the manufacture of steel ingots.
In
the revision order of the Revenue dated 7 July, 1967 in paragraphs 4
and 6 it is stated that the claim of the responcknt was for duty paid
material used in the making of steel ingots.
The Revenue Authorities
in the said order did not accept the claim of the respondent for exemption on the ground that duty paid pig iron was mixed with non duty
paid pig iron.
In J;!aragraph 9 of the affidavit of the Rl'.venue used in the High
Court the Revenue said that the various scraps mixed included duty
~
paid and non duty paid scraps.
The Revenue referred
to
rejected
ingot moulds and bottom stools as scrap.
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The respondent in the affidavit in reply in the High Court stated
that the "question for consiaeration in these writ appiications is
the
rate of duty leviable on steel ingots produced from processed moulds
and bottom plates which have already borne a duty".
The respondent also stated that the processed mould and bottom plates used in
the manufacture of steel ingots are recorded.
The respondent contended that it was never the case of the Revenue that it was scrap in respect of which the respondent wanted exemption.
Counsel for the respondent rightly submitted that if the Revenue
made that case the respondent would have produced not only affidavit
evidence but also evidence of experts to determine the question of fact
whether the article, viz., melted ingot mould and bottom stools altered
the character of duty paid pig iron.
Counsel for the respondent is right in the contention that the only
question here is whether duty paid pig iron is used along with non duty
paid materials.
There is no dispute that there are materials and data
to find out the quantity of duty paid pig iron used.
Pig iron is made
out of iron ore plus limestone plus coke.
Pig iron is melted and processed inoo ingot moulds and bottom stools.
Nothing is added to pig
iron.
When ingot moulds and bottom stools become
unserviceable
they are broken.
This becomes scrap and is melted and used in the
manufacture of steel ingots.
The respondent rightly contends that all
the time it is duty paid pig iron which is processed into ingot moulds
and bottom stools and again broken into scrap and melted
in
the
making of steel ingots.
The High Court rightly held that th(( contention of the Revenue
fails on two broad grounds.
First, there cannot be double taxation
on the same article.
Counsel for the Revenue gave the example of
excise duty on motor cars, in spite of the fact that there was duty on
tyres and duty on metal sheets.
The analogy is misplaced.
In such
cases the duty is on the end product of motor cars as a whole.
The
duty on tyres and the duty on metal sheets do not enter the area of
duty on motor car.
Second, Notification No. 30/60 grants exemption
to duty paid pig iron.
The High Court rightly said that the Notification does not say that exemption is granted only when duty paid pig
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UNION v. TATA TRON & STEEL CO. (Ray, C.J.)
1049
iron is used and that the exemption would not be available if. duty paid
A
pig iron is mixed with other non duty paid materiais. If the intention
'Of the Government were to exclude the exemption to duty paid pig
iron when mixed with other materials then the notification would have
used the expression "only" or "exclusively" or "entirely" in regard to
1
duty paid pig iron.
The object of the notification was to grant relief
by exempting duty paid pig iron,
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For these reasons, the judgment of the High Court is affirmed and
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the appeals are dismissed.
Parties will pay and bear their own cost5.
S.R.
Appeals dismissed.
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