2004 (4) TMI 466 - AT - Central Excise

Summary

Issues:
Whether "Bright MS bars" drawn from "Black MS bars" of slightly higher diameter are exigible to duty of excise.

Analysis:

The appeal before the Appellate Tribunal CESTAT, Chennai revolved around the question of whether "Bright MS bars" derived from "Black MS bars" with a slightly larger diameter are subject to excise duty. The Tribunal considered the arguments presented by both sides and examined relevant case law to reach a decision.

The appellant's counsel contended that the issue was settled by previous decisions of the Tribunal and the Supreme Court. The counsel referenced specific cases such as Navsari Processing Industries v. CCE, Vee Kayan Industries v. CCE, and others to support their position. Notably, the counsel highlighted a case involving Nail & Allied Products, where the Tribunal's decision was upheld by the Supreme Court in a civil appeal.

Upon reviewing the cited case law, the Tribunal found that the consistent legal position was that reducing the dimension or gauge of a wire rod does not constitute a process of "manufacture" under the Central Excise Act. In the present case, the transformation of MS rods into bright MS bars involved a mere reduction in diameter, which did not meet the threshold for being classified as manufacturing activity under Section 2(f) of the Act. The Tribunal noted the absence of any contrary binding judicial precedent and concluded that the bright MS bars in question were not liable for excise duty.

Consequently, the Tribunal set aside the impugned order that had demanded differential duty on the goods and imposed a penalty on the appellant. The appeal was allowed in favor of the appellant, affirming that the bright MS bars cleared during the disputed period were not subject to excise duty.