P L D 1971 Karachi 652 (PLP)

ABDUL KADIR SHAIKH, J.

These petitions were heard together as common questions of law arising out of almost similar facts are involved. The case of the petitioners is that they carry on business of re-rolling of mild steel and pay excise duty thereon at Rs. 25 per ton under item No. 25 of the First Schedule to the Central Excises and Salt Act, 1944. By Finance Act, 1967, the Excise duty was imposed on the primary product "Steel Ingots" at the rate of Rs. 50 per ton, with the other commitments like sales tax, defence, surcharge, etc., "Steel Ingots", according to the definition given in the Act, "means the primary product obtained by smelting iron ore, pig iron, iron-scrap or any other ferrous raw material whether cast in the mould in any shape or form, or whether used in molten or semi finished state for the manufacture of rolled or forged steel products." The contention of the petitioners is that they do not produce steel ingots" by the above process, and in fact they do not even have arrangements for the smelting of iron-scrap; the levy and the demand of Excise duty from them is, therefore, without lawful authority. The sole question that is to be determined in these cases, therefore, is whether the petitioners are manufacturing "steel ingots" by the process described in the Finance Act, 1967. In order to resolve this controversy, it was agreed that the Departmental Officer conversant with the facts be examined in Court to describe the process by which the petitioners obtain "steel ingots" in their Mills. Mujib Ahmed Ansar, the Superintendent, Central Excise, Karachi was, therefore, examined in Court today. He described this process as follows : Iron in the petitioner-Mill is heated to such a degree that it becomes extremely softened and is malle able, and it can easily be turned into any shape or forms. It is neither a hard substance nor is it in liquid form. The new produce is then turned into "steel ingots". He, however, admitted that iron-scrap in the petitioners-Mill never reaches the melting point. "Smelting", according to Black's Law Dictionary, means melting of ores in the presence of some re-agent which operates to separate the metallic element by combining with a non metallic element. Chamber's Technical Dictionary, 1968 Edition, describes this process as "Fusion of an ore or concentrate with suitable fluxes, to produce a melt consisting of two layers-on top a "slag of the flux and quaque minerals and below molten impure metal." Smelting, therefore, means melting; this was even admitted by Mujib Ahmed Ansar, the Superintendent of Central Excise. Now, melting can take place only if a solid material is heated to such an extent and degree that it becomes a liquid. To "melt" means to become liquified by heat. It is admitted that iron-scrap at the petitioners' mill never reaches the state of its being a liquid. This turning point is never reached. A Clearly, therefore, the petitioners cannot be said to have adopted the process of smelting described in the Act for the manufacture of the produce "steel ingots" so as to become liable to excise duty introduced by the Finance Act. On this view of the matter, the levy of excise duty from the petitioners is without lawful authority, and we quash the impugned orders challenged in these cases. All these petitions thus succeed, but as the dispute involved resolution of legal controversy, we leave the parties to bear their own costs. A. E. Petition allowed.