Full Judgment Text
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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
BHARUCHA. 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.