Circular No. 327/43/97-Central Excise
dated 1/8/97
F.No. B-31/7/97-TRU
Government of India
Ministry of Revenue
Tax Research Unit, New Delhi
Subject : Application of S. 3.A of the Central Excise Act, 1944 to Re Rolling Mills and Induction Furnaces
I am directed to refer to the Ministry”s letters of even no. dated the 25th July, 1997 (Circular No. 326/42/97-CX) relating to application of section 3A of the Central Excise Act, 1944, to re-rolling mills and letter F.No. B-31/4/97-TRU, dated the 25th July, 1997 (Circular No. 325/41/97-CX) relating to induction furnace units and to say that some changes have been made in these schemes. They are indicated below. However, both the schemes come into force w.e.f. 1.8.97 as originally intimated.
2. Notification Nos. 42/97-CE to 45/97-CE and 22/97-CE(NT), 23/97-CE(NT), 25/97-CE(NT) to 27/97-CE(NT), all dated the 25th July, 1997 have been rescinded. In lieu thereof new notifications, incorporating some changes, have been issued. Copies of notification Nos. 46/97-CE to 5297-CE and 29/97-CE(NT) to 34/97-(NT),all dated the 1st August, 1997 being enclosed herewith1.
3. There is no change in the basic scheme announced on 25th July, 1997 in both cases i.e. for the induction furnace units and re-rolling mills.
4. The modification made are indicated below:
(a) The valve of “e” has been changed to 0.30 for low speed mills and to 0.75 for high speed mills.
(b) High speed mills and the low speed mills have been defined on the basis of speed of re-rolling mill, the cut off point being a speed of 8.5 meters per second.
(c) the value of “w” has been modified for diametre size below 200 mm, and three new slabs, namely, “below 100 mm”, “100 to below 150 mm.” and “150 to below 200 mm”. have been introduced. Similarly, in higher category, new slabs of “400 to below 450 mm.”, “450 to below 500 mm.” and “500 and above” have been introduced. for value of “w” against each slab, notification No. 32/97-CE(NT) may kindly be seen. It may be seen that for high speed mills, the value of “w” has been adopted as 0.45 for each such mill.
(d) The term “nominal diameter” has been defined vide Explanation II in notification No. 32/97- CE (NT) to mean the distance between pinion centers on the last rolling stand. This should facilitate determination of “d” for a re-rolling mill.
(f) In the case of re-rolled products, some new sub-headings of the tariff have been added. Notification No. 31/97-CE(NT) may kindly be seen. It may also be observed that stocks of re-rolled products lying with the mills as on 1.8.97 will be charged to duty at a specific rate of Rs. 300 per metric tonne. Stocks of ingots or billets in induction furnace units will be charged to duty at a specific rate of Rs. 600 per metric tonne. Notification No. 5097-CE may be seen. It may, however, be observed that these specific rates shall not apply to waste and scrap lying with induction furnace units or re-rolling units as on 1.8.97. Such waste and scrap, if any, will be liable to duty at 15% ad valorem.
(g) It may be noted that integrated steel plants and composite plants with continues casting facility or refining facility will not come within the purview of section 3a scheme. Explanation to notification No. 31/97- CE(NT) may kindly be seen for details. similarly exclusion of certain composite mills and integrated plants vide Explanation in notification No. 30/97-CE(NT) in respect of induction furnace units may be taken note of. Such plants will continue to pay duty under the normal scheme under section 3.
(h) It has been decided to exempt waste and scrap arising in the course of manufacture of ingots and billets (in the case of induction furnaces) as also the waste and scrap arising in the course of production or manufacture of hot re-rolled products (in the case of hot re-rolling mills), from whole of excise duty. Notification No. 49/97-CE refers.
(i) For re-rolling mills of nominal diametre below 200 mm., concessional rate of duty has been prescribed. The rate of duty will be Rs. 150 per metric tonne vide first proviso to sub-rule (3) of rule 96ZP. It may also be observed that the stocks of re-rolled products lying with such mills will be allowed to be cleared at a concessional rate of Rs. 150 per metric tonne vide S.No. 3 of notification No. 50/97-CE.
5. The instructions contained in Ministry”s two letters referred to above in this letter may be read in conjunction with the changes which have now been made.
6. Incidentally, it is noticed that in the example illustrated in paragraph 6 of Circular No. 326/42/97-CZ, dated 25.7.97, the value of constant has wrongly appeared as 1.8885, which was a typographical error. It should have been 1.8885. The number of hours utilised for pusher type furnace (1 or more) will now be 2400 (fixed) as explained earlier and the value of “e” will be 0.30 for low speed mills.
