Customs, Excise and Gold Tribunal - Delhi
Nahan Foundry Ltd. vs Collector Of Central Excise on 24 April, 1998
Equivalent citations: 1998(104)ELT369(TRI-DEL)
ORDER Jyoti Balasundaram, Member (J)
1. The appellants herein manufacture items such as Cast Iron Angithis, Cast Iron Water Meters, Cast Iron Hydrant Posts etc. They claimed the benefit of Notification No. 179/77-C.E., dated 18-6-1977 on the ground that the goods were manufactured without the aid of power. However, on checking, it was found that the goods were being manufactured with the aid of power by way of lifting the raw material with crane and trolley and further by using blowers in the coal-fed-cupola. During the period 1-4-1983 to 28-2-1984, the appellants cleared goods without payment of duty. A show cause notice was issued to the appellants on 22-4-1985 proposing recovery of duty of Rs. 6,10,739.40 under Section 11A of the Central Excise Act, 1944. The Assistant Collector rejected the contention of the assessees that the lifting of raw materials by power and using power for the blowers did not amount to manufacture of goods with the aid of power; hence he confirmed the duty demand but reduced it to Rs. 55,221.70, accepting the assessee's plea that the duty should be calculated taking the value as cum-duty value. The lower appellate authority upheld the order of the Assistant Collector holding that blowers are operated with the aid of power for the purpose of bringing about change in raw material and therefore the use of the blower is in relation to be manufacture of goods. Hence this appeal, we have heard Sh. G.S. Bhangoo, learned Counsel and Sh. S.N. Ojha, learned DR.
2. Both the authorities below have clearly hold that blowers in the Coal-fed-coupla are used for bring about transformation in the raw material and hence the use of power is in relation to the manufacture of the final products. This factual position is not disputed by the appellants. The contention of the appellants that power is used only at the stage of manufacture of castings falling under T.I. 25 and not in the manufacture of T.I. 68 goods cannot be accepted in view of the fact that what emerges after the entire process of manufacture are goods falling under T.I. 68. Hence we have to hold that power has been used in the manufacture of goods falling under T.I. 68. The Hon'ble, Supreme Court held in the case of CCE v. Rajasthan State Chemical Works, 1991 (55) E.L.T. 444 (S.C.) that use of power for the lifting of raw materials is also use of power in or in relation to manufacture of goods. Hence we hold that the appellants are not entitled to the benefit of Notification No. 179/77. However they have a good case on time bar. They were under a bona fide belief based upon the judgment of the Hon'ble Gujarat High Court in the case of Nirma Chemicals [1981 (8) E.L.T. 617 (Guj.)] and the Tribunal's judgment in the case of CCE v. Rajasthan State Chemicals Works, that the use of power in lifting of raw materials did not amount to manufacture of goods with the aid of power. Further we note that the show cause notice does not invoke the proviso to Section 11A of the Central Excise Act, 1944 and does not allege any suppression on the part of the appellants. In these circumstances, the extended period of limitation is not attracted to the present case and therefore the demand is sustainable only for the normal period of limitation.
3. In the result while upholding the impugned order on merits, the demand is restricted to the normal 6 months period of limitation and the demand beyond the normal period is set aside.
4. The appeal is disposed of in the above terms.