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PETITIONER: STEEL AUTHORITY OF INDIA LTD.

       Vs.

RESPONDENT: COLLECTOR OF CENTRAL EXCISE, BOLPUR.

DATE OF JUDGMENT:       20/02/1997

BENCH: S.P. BHARUCHA

ACT:

HEADNOTE:

JUDGMENT:                       J U D G M E N T MAJMUDAR. J.      I have  had the benefit of reading the judgment that my brother, Majmudar,  J., is  about to  deliver and  I  am  in respectful agreement  therewith. These few lines may be read as an addendum thereto.      Let me  assume for the moment that the assessee was not making   clearances on  the basis  of "the later the better" principal. It  would have  paid excise  duty on the pig iron input and  claimed, under the notification dated 27th March, 1971, set  off of the amount thereof when clearing the steel ingots produced therefrom. To illustrate, it would have paid Rs.‘X’ against  the excise  duty of  Rs.‘Y’ payable  on  the steel ingots produced therefrom.      The assessee  has, with  the permission  of the  excise authorities, followed  over a  large number  of  years  "the later the  better" principal.  It does so to save itself and the excise authorities the hassle of making the book entries required by  the   said notification  of taking  and  giving credit for  the excise  duty on  pig iron when paying excise duty on  the steel  ingots produced  therefrom. Instead, the assessee pays  excise duty  on  the  steel  ingots  that  it manufactures and  does pay  excise duty on the pig iron that it  uses   in  such   manufacture.  To   use   the   example aforementioned, it  pays excise duty of Rs. ‘Y’ on the steel ingots.      By  reason  of  the  use  of  "the  later  the  better" principle, with  the concurrence  of the Excise authorities, the  assessee   cannot  be   placed  in   a  position   more disadvantageous than  it would have had it not followed that principle It  cannot be  asked to  pay excise  duty on  some theoretical proportion of pig iron that has not been used in the  manufacture   of  steel   ingots  but   has  come  out, incidentally, as  steel scrap. It must be borne in mind that the pig iron is used to produce the steel ingots and not the incidental steel scrap.