2003 (12) TMI 380 - AT - Central Excise

Summary

Issues:
1. Whether the process of corrugation of plain galvanized mild steel sheets amounts to manufacture.
2. Whether the appellant is entitled to the exemption under Notification 16/97.
3. Classification of the goods under Chapter 72.10 of the tariff.
4. Entitlement of Modvat credit on duty paid inputs.
5. Recalculation of value for duty assessment.
6. Determination of penalty.

Analysis:

1. The appellant was involved in corrugation of plain galvanized mild steel sheets and was issued a notice proposing duty demand on the ground that corrugation amounted to manufacture. The Commissioner held that corrugation did amount to manufacture and denied the exemption under Notification 16/97 due to brand name presence on the sheets. The appellant did not dispute that corrugation was not manufacturing but contended that the goods did not fall under Chapter 72.10 of the tariff. The Tribunal referred to previous decisions and concluded that corrugation does amount to manufacture, allowing the appellant to claim Modvat credit on duty paid inputs.

2. The appellant argued that the goods did not fall under Chapter 72.10 of the tariff as they did not meet the requirements specified. However, the Tribunal clarified that the classification under Heading 72.10.11 for corrugated products was appropriate based on the definition provided in Rule 1(k) of Chapter 72. The Tribunal emphasized the distinction between products with relief patterns derived from rolling and those that have been perforated, stating that perforation was not necessary for classification.

3. The Tribunal ruled that once it was established that corrugation amounted to manufacture, the appellant could claim Modvat credit on duty paid inputs used in production. Citing precedents like Bharat Wagon & Engg. v. CCE, the Tribunal highlighted that procedural requirements should not hinder the credit claim, especially when duty liability arose due to departmental interpretation. The matter was to be remanded for further proceedings.

4. The appellant also raised concerns regarding the duty calculation based on the sale price of corrugated sheets. The Tribunal agreed to remand the matter to the Commissioner for reassessment of the duty liability and value calculation, considering the materials the appellant undertook to produce within a specified timeframe. Additionally, any penalty imposed was to be determined in light of the duty liability established.

In conclusion, the Tribunal's judgment clarified the classification of the goods, affirmed the appellant's entitlement to Modvat credit, and directed a reassessment of duty liability and value calculation, while considering the evidence to be provided by the appellant.