Customs, Excise and Gold Tribunal - Delhi
Elgi Rubber Products Ltd. vs Collector Of Central Excise on 24 September, 1991
Equivalent citations: 2002(145)ELT112(TRI-DEL)
ORDER K.S. Venkataramani, Member (T)
1.On hearing ld. Counsel, Sh. Lakshmikumaran for the appellants and Sh. Narasimha Murthy, ld. DR for the Department, we find that the question involved in this appeal is whether the activity of powdering of scrap tyres undertaken by the appellants to make it into crump rubber would amount to process of manufacture attracting Central Excise Duty. The Tribunal had earlier in the case of Gujarat Reclaim & Rubber Products Ltd. v. Collector of Central Excise & Customs, Bombay reported in 1983 (14) E.L.T. 2401 (C.E.G.A.T.) hold that crushing of rubber into powder is not manufacture. The Tribunal's decision was challenged in appeal before the Supreme Court by the Department which had been dismissed by the Supreme Court by observing as follows :
"The Tribunal has found that the powder formed by crushing the old rubber is neither commercially nor chemically a new product. Learned Counsel for the petitioner contends that the Tribunal has held that the powdered rubber is not a new product merely because no chemical reaction is involved in the process of crushing and that this is erroneous. This is a very narrow reading of the Tribunal's order. The Tribunal has not only given a finding that the powder is secured by a mere process of crushing but also that the crushed product was not a new product. This is essentially a finding of fact. We, therefore, dismiss the appeal." 1990 (45) E.L.T. A.67 It is, further, seen that the appellants in their reply to the show cause notice have specifically referred to Gujarat Reclaim & Rubber Products Ltd., being one of their competitors and that the method of producing the powder in the two units is the same. Therefore, in view of the Tribunal's decision that such an activity will not amount to manufacture, as upheld by the Supreme Court, we see lot of force in the appeal which is accordingly allowed and the impugned order is set aside.