Customs, Excise and Gold Tribunal - Bangalore
Commissioner Of Central Excise, ... vs Karnataka Electricity Board, ... on 28 May, 2001
Equivalent citations: 2001(133)ELT179(TRI-BANG)
ORDER
Shri G.A. Brahma Deva
1. These are two appeals filed by the Revenue against the impugned Order-in-Appeal No 26/95 dated 30.11.95 passed by the Commissioner of Central Excise, Bangalore.
2. Dispute is in respect of the following items:
i) 2 pin X arm.
ii) 4 pin X arm.
iii) Special 3 pin X arm.
iv) horizontal X arm
v) Anchor Rod
vi) Clamps for RCC/PCC poles
vii) Clamps for street light fixtures
viii) H.T. top support & L.T. top supports
ix) T.C. sets upto 100 KVA and T.C. sets above 100 KVA
x) D.P. sets
xi) G.O.S. Ladders and Bracesses The Assistant Commissioner as per his Order has held that the above items are not excisable. Not being satisfied with the findings given by the Assistant Commissioner, the Department has filed an appeal before the Commissioner(Appeals). The Commissioner (Appeals) has held that the process of punching, drilling and galvanizing of duty paid M.S. Angles and Plates of specified sizes does not amount to manufacture for the simple reason that the basic nature of the disputed product namely duty paid M.S. Angles and flats continue to be the same. Aggrieved by the said Order, the department has come before us by way of these two appeals.
3. Smt Radha Arun appearing for the Revenue while reiterating the grounds submitted that the goods are manufactured as per their specific drawings and for specific use. The process of punching, drilling and galvanizing of duty paid MS Angles and flats is not the only process involved as held by the Commissioner but some more processes were undertaken. Further as can be seen from the technical writ-up furnished by the assessee that even though the process of manufacture involved cutting, sizing, drilling, pastening etc., the goods are made to certain specifications, with a distinct feature and usage. After the process of manufacture new product emerges which is supplied to their various branches for various uses. Further, she submitted that the Supreme Court in it's recent judgement has dismissed the Civil Appeal No. 3561/62 of 93 filed by Tamil Nadu Electricity Board against the Final Order No E/204 and E/205 of 91 dated 8.4.91 passed by the CEGAT, New Delhi wherein the question involved was whether the transformed structural materials, stay rods etc., have distinct name and identity different from the raw-materials and have their own usage. The Appellate Tribunal has held that process undertaken brought into existence new articles and the conversion would amount to manufacture within the meaning of Section 2(f) of the Central Excise and Salt Act 1944.
4. She submitted that the Order passed by the Commissioner (Appeals) is non-speaking order in as much as he has not discussed the process of manufacture with reference to each and every item. She referred to the finding portion of the impugned order which is as follows:
"I have carefully considered the case record. I have also heard Shri C.R. Sridhar, learned Advocate and Mr. R.N. Nagaraj of M/s K.E.B. The process of punching drilling and galvanizing of duty paid M.S. angles and flats of specified sizes does not amount to manufacture for the simple reason that the basic nature of the disputed product namely duty paid M.S. angles and flats continue to be the same. Therefore, I do not find any merit in the appeal of the Department.
For the aforesaid reasons, I decline to interfere with the OIO No. V/27/15/8/93 B.5 (SI. No. 2/94) dated 2.9.94 and C.No. V/73/3/12/93 B.3 dated 2.9.94 of the Asstt Collector of c.Ex Bellary, Consequently, the department's appeal fails."
5. She requested that matter may be remanded since the matter has not been dealt with in detail by the Commissioner (Appeals) as can be seen.
6. On the other hand Shri Chandra Kumar learned Senior Advocate appearing for the appellants submitted that there is no necessity to remand the matter since every aspect has been dealt with in detail by the Authorities below. He said that question of classification arises only when the goods are excisable. There is a clear finding by the Assistant Collector that items in question do not involve any process of manufacture other than cutting drilling and punching except one item i.e. iron rock. He submitted that Assistant Commissioner has given a categorical finding that with reference to the marketability of the goods as well as on excisability and in this context he referred to the relevant finding portion of the Assistant Collector.
"It the party were to sell the listed items they can only be sold as either M.S. Angles or M.S. Flats, and not as the items with the nomenclature given by the party. The nomenclature given is essentially for internal use and it has no relation to the trade parlance. The party has given different names to different products after subjecting the M.S. Angles to cutting, sizing, and drilling, for the convenience of usage by the field men, giving a nomenclature like a 2/3/4 pin horizontal cross arm or a T.C. set or a D.P. set or clamps does not alter the fact that basically these are either M.S. Angles, or M.S. Flats, subjected to process which does not amount to manufacture for Central Excise purposes. It was also held that, article with a different name emerged, but if it is not a distinct article with different character or use, no manufacture has taken place-1988 (35) ELT 361 Tribunal)."
7. We have carefully considered the submissions made by both sides and perused the records. There is some force in the arguments advanced on behalf of the Revenue that Commissioner (Appeals) has not given proper reasoning with reference to each item while deciding the issue in favour of the assessee We also agree with the plea taken by the revenue that the Assistant Commissioner has given some reason in holding that it does not amount to manufacture but the reason is based upon the personal opinion but not supported by evidence i.e. technical literature etc. It was also submitted that issue with reference to the marketability has not been examined in detail. There is no clear finding by the Authorities below whether the item as such is marketed or is capable of being marketed. We also take note of the fact that Supreme Court in the recent RLT (2001 (44) RLT, 113 (SC) Collector of Central Excise Vs Man Structurals Ltd.) remanded the matter observing that the Tribunal has failed to consider whether structurals are new identifiable goods produced as a result of manufacture processes and are marketable. Para 4 & 5 of the said decision are relevant in this context and they are as under:
"4. It was for the Tribunal to determine, as a fact whether the structurals that the Department sought to make exigible to excise duty in the various appeals before it were new, identifiable goods which were produced as a result of manufacture of processes which are marketable. Depending upon its conclusion on these aspects in each of the appeals before it, it was for the Tribunal to determine whether or not the goods in question in each of these appeals were exigible to excise duty.
5. In the judgement and order of the Tribunal that is under challenge the Tribunal has failed to consider the facts of even a single of the appeal before it. It has proceeded simply upon the basis the structurals are not exigible to excise duty. It has failed to appreciate that there is a tariff entry which makes structurals exigible to excise duty and that they are so exigible, provided that they are new identifiable goods that are the result of manufacture or processes and they are marketable."
8. Following the ratio of the aforesaid decision we are remanding the matter to the jurisdictional Assistant Commissioner to examine the issue afresh and to pass an Order accordingly on providing an opportunity to the party. All contentions may be raised before the Assistant Commissioner by either party. Liberty is given to produce additional evidence. These two appeals are disposed off in the above terms. Cross-objections are also disposed off accordingly.
(Pronounced in open court on 28-5-2001)