2005 (1) TMI 441 - AT - Central Excise

Summary

Issues:
- Whether the appellants are related persons under the Central Excise Act.
- Confirmation of demands and penalties imposed on the appellants.
- Whether the activity of drawing wire from wire rods amounts to manufacture.
- Applicability of Central Excise Tariff Act amendments.
- Consideration of valuation of goods manufactured by the appellants.

Related Persons under Central Excise Act:
The case involved M/s. Gowtami Steels Ltd. and M/s. Ananda Subbaraya Wire Products (P) Ltd., both private limited companies with closely related directors. The Revenue alleged that M/s. Gowtami Steels Ltd. was selling goods to M/s. Ananda Subbaraya Wire Products (P) Ltd. at a lower price than to other buyers, leading to a case against M/s. Gowtami Steels Ltd. as related persons under the Central Excise Act. Demands and penalties were confirmed for specific periods, and penalties were imposed on the appellants. The Tribunal considered the challenge against the Order-in-Original.

Manufacture and Excisability of Goods:
During the appeals, it was highlighted that the activity of drawing wires from wire rods by M/s. Gowtami Steels Ltd. did not amount to manufacture during the relevant period before the 2004 amendment of the Central Excise Tariff Act. The amendment specified that drawing wire from wire rods constituted manufacture. The Tribunal noted that since drawing wire from wire rods did not amount to manufacture during the relevant period, the goods manufactured by M/s. Gowtami Steels Ltd. were not excisable. This finding rendered the question of valuation irrelevant, leading to the allowance of the appeals with consequential relief.

Conclusion:
The Tribunal's decision focused on the interpretation of whether drawing wire from wire rods constituted manufacture under the Central Excise Act, impacting the excisability of goods manufactured by the appellants. The issue of related persons under the Act was also addressed, along with the confirmation of demands and penalties. The Tribunal's analysis of the legal aspects and amendments to the Central Excise Tariff Act played a crucial role in determining the outcome of the appeals and providing relief to the appellants.