Customs, Excise and Gold Tribunal - Delhi
Collector Of C. Ex. vs Pratap Rajasthan Special Steel Ltd. on 11 August, 1998
Equivalent citations: 1999(108)ELT437(TRI-DEL)
ORDER G.A Brahma Deva, Member (J)
1. The short question which arises for our consideration in this case is: whether various structures like trusses, beams and purlines etc. which had been made by the process of cutting and welding tantamount to manufacture. The Addl. Collector who adjudicated the matter relying upon the decision of the Tribunal in the case of Aruna Industries v. C.C.E., Guntur 1986 (25) E.L.T. 580 has held that for a manufacturing process to take place change of- identity of product is a must, cutting, welding, drilling do not tantamount to manufacture and that assembling of structural and shapes for building construction is not manufacture. It is also held in that case that the goods which are not manufactured or not moved from the factory are not excisable and the factory did not include construction site the trusses and drillings were not items of manufacture.
2. Arguing for the Revenue Shri D.S. Negi, SDR submitted that name, character and end-use of the product is relevant to decide the issue. The items trusses and purlines are altogether different from the raw materials i.e. angles and channels and use of the items in question is also different from the use of the original items and in view of this the items in question are dutiable. He submitted that the items i.e. trusses and purlines were complete in the factory and subsequently they were taken to site. Department is intending to levy duty oh these items and not on shed altogether. Referring: to the decision of the Supreme Court in the case of S.D. Fine Chemicals Pvt. Ltd. 1995 (77) E.L.T. 49 (S.C.) the said that definition of manufacture under Section 2(f) of the Act is not confined to the natural meaning of the expression but is an expansive definition. Certain processes, which may not have otherwise amounted to manufacture, are also included therein. Not only the processes which are incidental and ancillary to the completion of manufactured product but also those processes as are specified in relation to any goods in the section or chapter notes of the Schedule to the Central Excise Tariff Act, 1985 have also been brought into its ambit. He also relied upon the decision of the Supreme Court in the case of Parley Products 1994 (74) E.L.T. 492 (S.C.) wherein it was held that question whether manufacture involve or not in a given case, to be decided on evidence based on trade parlance and not on Court's own perception and appreciation of the matter. He submitted that trusses and purlines were specifically classified under T.I. 73.08 from 1-3-1988 and that it shows that they are dutiable items and even prior to 1-3-1988 they were known different from the angles and the trade circles and accordingly they are different items from the original items.
3. Shri Madhav Rao, ld. Advocate, appearing for the respondents submitted that Tribunal has been consistently taking the view that cutting, welding and putting holes does not amount to. manufacture. He said that the issue involved in this case has been consequently covered by the decision of the M.P. High Court in the case of Bajaj Tempo Ltd. 1997 (95) E.L.T. 212 and same has been followed in the case of Kinetic Honda Motors Ltd. 1996 (81) E.L.T. 48. In the case of Bajaj Tempo Ltd., the shed is built by trusses columns, girders, purlines and other articles. The department took the view that construction is not fabrication of certain articles but manufacture of the said article. But the M.P. High Court held that erection of shed at site with the help of various articles of iron and steel, only a fabrication activity does not amounts to manufacture if no new and distinct article having come into existence. We find that in the case of Kinetic Honda Motors Ltd. (supra) further it was clearly held that the process of drilling, cutting and welding of duty paid iron and steel products for construction of sheds not amounts to manufacture. Articles so used is not liable to be classified as goods within the meaning of Section 3 of CESA, 1944 and are not chargeable to duty. The Tribunal also has been consistently taking the view as can be seen from the latest decision of the Tribunal in the Orissa Construction Corpn. Ltd. 1997 (95) E.L.T. 398 as well as in the case of Tansi Engg. Works 1996 (88) E.L.T. 407. In the case of Tansi Engg. Works it was . held that cutting and punching of holes in angles and channels not amounting to manufacture as no new commodity brought into existence irrespective of particular item mentioned in Tariff Schedule. This was the view of the Tribunal even in the case of Orissa Construction Corpn. Ltd. that fabrication of steel structurals by cutting to size, drilling holes and welding or re-melting of materials supplied by customers does not amount to manufacture. In view of the series of decisions in favour of the assessee and in the absence of any contrary decision of the Apex Court, we do not find any infirmity in the impugned order passed by the Additional Collector. We are also not convinced with the arguments advanced by the Revenue that the decisions referred to above by the ld. Counsel are not applicable to the facts of the case. In the view we have taken the appeal filed by the Revenue is hereby dismissed. Ordered accordingly.
Appeal No. E/273/91-B1
4. Similar arguments have been advanced on behalf of the appellants in this appeal and countered by the arguments by Shri D.S. Negi, SDR referring to the above decisions.
5. In view of the foregoing discussions and following the decisions of the Tribunal in the case of Aruna Industries (supra) as well as Tansi Engg. Works (supra) and the decision of the M.P. High Court in the case of Bajaj Tempo Ltd. (supra), we have accepted the contention of the appellants and accordingly appeal is allowed with consequential relief, if any. Ordered accordingly.
Appeal No. E/2236/91-B1
6. We find that issue in this case is similar to the cases referred to above, whether cutting and welding amounts to manufacture is an issue to be considered. In view of discussions and following the ratio of the decisions referred to above, appeal is allowed with consequential relief, if any.