1. The question involved in all these three appeals is the same and the facts and question of law being one and common, so we are disposing of all these appeals by this common order.
2. Briefly stated the facts involved in all these appeals are that M/s Tata Iron and Steel Co. Ltd., Jamshedpur (hereinafter referred to as Appellants) are engaged in the manufacture of iron and steel. Oxygen gas is very essential in the manufacturing process of iron and steel, which gas is supplied to the appellants by M/s Indian Oxygen Ltd., having its factory in Jamshedpur through pipe lines to the appellants' Blast Furnaces, Steel Melting Shops and various mills and other places inside the works where the appellants manufacture iron and steel.
3. Notification No. 145/71, dated 26-7-1971 has been issued by the Government of India, Ministry of Finance, Department of Revenue, under Sub-Rule (1) of Rule 8 of the Central Excise Rules, 1944 exempting Excise duty on Oxygen gas if it is used directly in the manufacture of steel. There is a further condition laid down in the said Notification that in case such oxygen gas is used for the manufacture of steel elsewhere than in the factory of production of Oxygen, the procedure laid down in Chapter X of the Central Excise Rules should be followed.
4. The appellants with a view to avail the benefit of the said notification applied to the Assistant Collector, Central Excise, Jamshedpur for L-6 Licence. This licence was granted under Rule 192 of Chapter X of the Central Excise Rules to purchase Oxygen without payment of excise duty for use in the appellants' works and since then the appellants started availing of the benefit conferred by the said Notification.
5. Later on, the Superintendent, Central Excise, Jamshedpur, started raising demands through D.D.R. in respect of Oxygen gas used in the Blast Furnaces on the ground that the Oxygen gas used in the Blast Furnaces is for making iron but not steel.
6. Being aggrieved by and dissatisfied with the demands raised by the department, the appellants filed appeals before the Appellate Collector, Central Excise, Calcutta. The main point raised by the appellants in the appeals was that 'hot metal' which is the product of the Blast Furnaces is directly utilised in the manufacturing process of steel. The word 'directly' should be construed liberally and that the manufacturing process of steel starts right from the manufacturing process of 'hot metal' in the Blast Furnaces, the two processes being inextricable.
7. The Appellate Collector, Central Excise, Calcutta, however, rejected the contention of the appellants holding that the word 'directly' used in the Notification No. 145/71, dated 26-7-1971 is very significant and it restricts the scope of concession.
8. Being aggrieved by and dissatisfied with the orders of the Appellate Collector, Central Excise, Calcutta, the appellants filed three Revision Applications before the Government of India, which now stand transferred to this Tribunal under Section 35P of the Central Excises & Salt Act, 1944 to be heard as appeals.
9. We have heard Shri Ravinder Narain, Advocate for the appellants and Mrs. Vijay Zutshi, S.D.R. for the department and gone through the record.
10. Shri Ravinder Narain the learned counsel for the respondent pointed out that this very issue involved in all these three appeals stands concluded by the Patna High Court in Civil Writ Petition No. 335 of 1978 (R) filed by the same party M/s Tata Iron and Steel Co. Ltd. against Union of India and Ors. which was decided on 29-4-1985. He supplied the photostat copy of that order. Hon'ble Mr. Justice Udai Pratap Singh of Patna High Court who, delivered the judgment held as under:- "The excise duty is on goods produced or manufactured. Melting of iron ore into metal is not manufacture. The petitioner used the Oxygen for the manufacture of steel and not for any other product.
The Iron ore is melted in the Blast Furnaces and the molten iron known as 'hot metal' is then conveyed to the steel melting shops for the manufacture of steel. The 'hot metal' is the basic material for the manufacture of steel and is taken directly to the steel melting shops. The entire process from the melting of iron ore to the production of steel is an intergrated process involving the use of Oxygen in its direct use in the manufacture of steel. Thus the petitioner was entitled to exemption form the excise duty on Tariff Item No.14-II in respect of the Oxygen directly used in the manufacture of steel." In the presence of this decision of the Patna High Court, the facts of which are identical with these of the appeals before us, Mrs. Zutshi the learned S.D.R. was having nothing to argue on behalf of the department.
11. Following the decision of the Patna H.C. in Civil Writ Petition No.335 of 1978 (R) titled Tata Iron &. Steel Co. Ltd. v. U.O.I. decided on 29-4-85, we set aside the impugned orders in appeals and allow all the three appeals with consequential relief.