Customs, Excise and Gold Tribunal - Delhi
Collector Of C. Ex. vs Bombay Wire Ropes Ltd. on 29 November, 1990
Equivalent citations: 1991ECR298(TRI.-DELHI), 1991(53)ELT115(TRI-DEL)
ORDER V. Rajamanickam, Member (T)
1. The appellants have filed a C.O.D. Application for condoning the delay in filing the Supplementary Appeals and this Tribunal by Order dated 06-11-1990 had condoned the delay.
2. The Collector (Appeals) had disposed of 3 Appeals petitions against three orders of the Assistant Collector by a common Order No. L-322-324/TH-20-22/84 dated 21-6-84.
3. The Revenue has come in appeal against the order of the Collector (Appeals) on the ground that Collector's order was not based on the facts of the case nor covered under the terms of reference for which the Respondents had filed the appeal against the orders passed by the Assistant Collr.
4. The facts of the case are, the Respondents - M/s. Bombay Wire Ropes Ltd., are manufacturing Wire "Strands" falling under T.I. 68 and clearing them on payment of duty on the value of job charges as per Notification No. 119/75-CE. They had not made any declaration in the Classification List of the fact of availing the Notification No. 119/75 and, therefore, Show Cause Notices were issued demanding duty basing the assessment on the full value of the raw-materials and the value of the job-charges for the purpose of determining the duty. The demands were confirmed and penalties were imposed.
On appeal before the Collector (Appeals), the appellants (Respondents now) have raised the following grounds :-
(i) They had paid duty on job charges under Notification No. 119/75;
(ii) The Classification List and R.T. 12 were approved;
(iii) The raw-material "wire rods" were cut to size and they only twist them and return them to their customers.
The Collector (Appeals) has held that mere cutting and twisting cannot be treated as manufacture and has allowed the appeal by setting aside the order of the Assistant Collector. The Revenue has come in appeal stating that Collector (Appeals) has based his findings on facts which are different from the order of the Assistant Collector who has held that the appellants are not entitled to the benefit of Notification No. 119/75.
5. During the oral submissions, the Ld. J.D.R. Shri M.S. Arora reiterated the grounds of appeal.
6. Shri Gopal Prasad, the Ld. Consultant, pleaded that the Supreme Court in Civil Appeal No. 510 of 1968 in the case of C.C.E., Indore v. Anand Behari Steel Wires & Other Products Ltd., Raipur, has held that stranding of wire remains a wire and there is no evidence of a new product coming into shape or in market parlance dealing them as otherwise and there was no manufacture involved and hence the order of the Collector (Appeals) was to be upheld. He further placed reliance on the case law reported in 1987 (27) ELT 216 (Guj.) - Natwar Rubber Products v. G.S. Kagzi and Ors., whereby it was held that twisting of copper wire does not amount to manufacture, and therefore, pleaded that stranding of wire does not amount to manufacture and no duty is payable.
7. We have considered the submissions. The Supreme Court's decision in Civil Appeal No. 510 of 1988 cited by the Ld. Consultant, has upheld the decision of the Tribunal that stranded wire is not classifiable under Item 68, and it continues to be a wire falling under T.I. 26AA (1-A). It was a choice between calling a stranded wire a "wire" than "goods elsewhere specified" to fall under T.I. 68. Therefore, the Ld. Consultant's plea that the Supreme Court's decision was that no manufacture was involved is incorrect. The Supreme Court held that there was no evidence that stranded wires were known in the market as anything else than wires. The other citation in 1987 (27) ELT 216 (Guj.) - Natwar Rubber Product v. G.S. Kagzi & Ors. was in relation to twisting of copper wires at the intermediate stage not amounting to manufacture. The direct judgment on "stranded wire" is the Supreme Court's decision that T.I. 26(AA)1A was preferred to T.I. 68. The Revenue's appeal is with reference to the order passed by the Collector (Appeals) which was not based on facts of the case and grounds of appeal by the appellant while the references were on the issue of availment of the Notification No. 119/75. The Collector (Appeals) held that mere cutting and twisting does not amount to manufacture and he did not issue a Speaking Order. The appeal of the Revenue is correct, that the Collector (Appeals) has not discussed the points of references and merely gone on a different premises. The original order has raised demands on the plea that the respondents were not entitled to the benefit of the Notification No. 119/75, as they did not declare in the Classification List, their intention to avail the benefit and paid duty on the job charges only and therefore the demands of duty were on the full value of the material plus the value of the job charges. The Notification No. 119/75-C.E., dated 30-4-1975 is an exemption notification which reads as follows :-
"Goods falling under Item No. 68, manufactured in a factory as a job work, are exempt from so much of the duty of excise leviable thereon as is in excess of the duty calculated on the basis of the amount charged for the job work.
Explanation. - For the purpose of this notification, the expression "Job Work" shall mean such Items of work where an article intended to undergo manufacturing process is supplied to the job worker and that article is returned by the job worker to the supplier, after the article has undergone the intended manufacturing process, on charging only for the job work done by him."
The notification pre-supposes that the goods should fall under Tariff Item 68. The Stranded Wires manufactured by the Respondents were classified under T.I. 68 and the Classification List was approved and R.T. 12 Returns were approved. The Supreme Court's decision that such stranded wire will not be covered by T.I. 68 is a later decision and all past assessments already made under T.I. 68 cannot be now re-opened. There was no dispute on the classification at the time when the Classification List was approved and if the Respondents had claimed the benefit of the Notification No. 119/75-CE, they would have been entitled to the same, as it is not in dispute that they were doing job work of stranding the wires. The charge is that it was availed without prior intimation and approval. The Assistant Collector apart from confirming the demands has imposed penalties under Rule 173Q of the Central Excise Rules. For the contravention, the penalties imposed are in order, but in fairness, since the Respondents would have otherwise been eligible for the exemption under the Notification No. 119/75, the demands for the duty are not payable and the consequential relief already permitted by the Collector (Appeals) in respect of duty, although on a different premises, is allowed to remain.
8. In consequence, the Appeal filed by the Revenue is partially allowed, with the modifications spelt out, as above.