1997 (4) TMI 453 - AT - Central Excise

Summary

Issues:
- Whether processing operations by the Appellants constitute 'manufacture' under Section 2(f) of the Central Excise Act, 1944.

Analysis:
The Appellants, engaged in manufacturing steel structurals and undertaking job work, challenged a duty demand and penalty imposed by the Collector of Central Excise, Hyderabad. The main issue revolved around whether the processing operations conducted by the Appellants on raw materials constituted 'manufacture' under Section 2(f) of the Central Excise Act, 1944. The Appellants argued that their processes, including galvanization and fabrication, did not amount to manufacture as the raw materials retained their essential characteristics. They cited previous Tribunal decisions to support their stance.

During the adjudication proceedings, the Collector observed that the processes involved in fabricating Antennae and transmission towers by the Appellants resulted in distinct products that ceased to be identifiable raw materials. The Collector distinguished a previous Tribunal decision and held that the Appellants' products were separately excisable under the Central Excise Tariff. The Appellants contended that the Collector's findings were incorrect, citing relevant Tribunal judgments that supported their position.

Upon reviewing the submissions from both sides, the Appellate Tribunal found that galvanization, as well as the fabrication of steel structurals by the Appellants, did not amount to 'manufacture' based on established legal precedents. The Tribunal referred to previous cases where similar processes were held not to constitute manufacture. Consequently, the Tribunal disagreed with the Adjudicating authority's findings and allowed the appeal, setting aside the impugned order.

In conclusion, the Tribunal ruled in favor of the Appellants, holding that the processing operations conducted by them did not amount to 'manufacture' under the Central Excise Act, 1944. The Tribunal's decision was based on established legal principles and precedents, ultimately leading to the allowance of the appeal and the setting aside of the duty demand and penalty imposed by the Collector.