Gujarat High Court
Raajratna Metal Industries Ltd. And ... vs Union Of India (Uoi) And Ors. on 20 January, 2004
Equivalent citations: 2004(112)ECR752(GUJARAT)
Author: M.S. Shah
Bench: M.S. Shah, A.M. Kapadia
ORDER M.S. Shah, J.
1. Mr. Kamal Trivedi, learned Additional Advocate General with Mr. Paresh M. Dave, learned Counsel for the petitioners seeks leave to delete prayer (A) and also the first part of prayer (D).
Leave as prayed for is granted.
2. The learned Counsel for the petitioners have shown to the Court the stainless steel iron rod with a gauge of 12 mm and the stainless steel wire made therefrom with the gauge of 0.80 mm and submitted that the stainless steel wire is an entirely different product (which is commercially also known as a different product) from the stainless steel rod and thereafter submitted as under:
(i) The decision of the Apex Court in the Collector of Central Excise v. Technoweld Industries was with reference to the mild steel rods/bars and mild steel wires made therefrom. Therefore, the said decision cannot be applied to the stainless steel wire made from stainless steel rods.
(ii) The process of drawing wire from mild steel rod is described at Annexure "1" (page 60) which is a very simple process whereas the process employed by the petitioners is at Annexure "F" (page 41) which clearly shows that the stainless steel hot rolled black wire rods undergo 12 processes and, therefore, the manufacturing process of stainless steel wires out of stainless steel hot rolled black wire rods is materially different from the process of drawing mild steel wire from mild steel rod.
(iii) The Apex Court has approved of the decisions of the Tribunal in Vishvaman Industries v. Commissioner of Central Excise , Jyoti Engg. Corporation v. Collector of Central Excise and M/s Hind Enterprises, but all those cases also dealt with drawing of mild steel wire from mild steel rod. On the other hand, in Krishna Wire Industries v. Commissioner of Central Excise 1983 ELT 984 : 1983 ECR 83 1D (Cegat), as Special bench of the CEGAT at New Delhi had examined the matter with reference to manufacture of stainless steel wire from stainless steel rods and it held that the activity is a manufacturing process. According to the learned Counsel, the Hon'ble Supreme Court had dismissed the assessee's appeal against the said decision of the Tribunal. In Technoweld's case, there is no reference to Krishna Wire Industries and, therefore, the Tribunal's decision in Krishna Wire Industries' case (as not disturbed by the Apex Court) must be treated as still holding the field in sofaras manufacturing of stainless steel wire from stainless steel rod is concerned.
(iv) Reliance is also placed on the decision of the Apex Court in Empire Industries Ltd. v. Union of India 1985 (2) ELT 179 : 1985 ECR 1169 (SC) : ECR C 797 SC wherein the court held that it is the transformation of a matter into something else and that something else is question of degree, whether that something else is a different commercial commodity having its distinct character, use and name and commercially known as such. If by application of labour and skill an object is transformed to the extent that it is commercially known differently. It will suffice to say that manufacture has taken place for the purpose of Central Excise.
Reference is also made to the Constitution Bench decision in Ujagar Prints v. Union of India insofar as the Constitution Bench has also approved of the ratio in Empire Industries; case.
3. Mr. Trivedi, learned Counsel for the petitioners states that in case ultimately the petitioner-Company fails, the petitioner-Company shall not claim refund of the excise duty which shall be paid if this Court grants adinterim/interim relief.
4. In view of the above submissions. Notice for final disposal returnable on 16th February, 2004.
Till then, without prejudice to the rights and contentions of the parties, the respondents shall permit the petitioners to pay the excise duty on stainless steel wires manufactured out of stainless steel hot rolled black wire rods with all other consequential benefits and liabilities including Cenvat credit in accordance with the Rules.
5. It is clarified that pendency of this petition does not preclude the Central Board of Excise and Customs from considering the question whether a distinction is required to be made between the process of drawing wires from mild steel rods on the one hand and the process of making stainless steel wires from stainless steel rods on the other hand, as contended by the petitioners.
6. Mr. DN Patel, learned senior standing counsel for the Central Covernment waives service of notice for respondent No. 1.
Direct Service is permitted on respondent Nos. 2 to 4.