2001 (10) TMI 785 - AT - Central Excise

Summary

Issues:
1. Appeal against order confirming excise duty on cold drawn wire rods.
2. Whether cold drawing of wire rods amounts to manufacture under the Central Excise Act, 1944.

Issue 1:
The appeal was made against an order confirming excise duty on cold drawn wire rods, along with interest and penalties imposed under the Central Excise Act, 1944. The duty amount was specified, and interest was levied at 24% per annum. Penalties were imposed under relevant sections of the Act and Central Excise Rules, 1944.

Analysis:
The appellant contested the order, citing various judgments by the Tribunal in similar cases. References were made to cases where it was held that certain processes, like re-drawing of wires from coils or converting hot rolled steel strips into cold rolled strips, did not amount to manufacture. The appellant argued that the process of cold drawing wire rods should not be considered as manufacturing under the Act, seeking relief based on precedent judgments.

Issue 2:
The key question was whether the process of cold drawing wire rods constituted "manufacture" under the Central Excise Act, 1944. The Department argued that cold drawing resulted in distinct products with enhanced properties, thus qualifying as manufacture and subject to excise duty.

Analysis:
The Department highlighted the differences between hot working and cold working of metals, emphasizing the unique properties and characteristics of cold worked products. They argued that cold drawing wire rods led to the creation of a new commodity with improved physical and mechanical properties, distinct from hot rolled wire rods. The Department contended that the value addition, pricing variance, and market identification of cold drawn wire rods as a separate product supported the classification of this process as manufacturing.

The Tribunal analyzed the issue and concluded that drawing wire from duty paid products, whether hot rolled or cold rolled, did not amount to manufacture under the Central Excise Act, 1944. By relying on the precedent judgments cited by the appellant and considering the nature of the process and resultant products, the Tribunal held that cold drawing wire rods did not attract excise duty. Therefore, the impugned order confirming duty on cold drawn wire rods was set aside, granting consequential relief to the appellant based on the established legal principles and interpretations of the Act.