2006 (1) TMI 376 - AT - Central Excise

Summary

Issues:
Contesting duty demand and penalty for job work carried out by the appellant.

Analysis:
The appellant, a manufacturer of Rubber Rolls, contested a duty demand of Rs. 7,85,773/- and a penalty of Rs. 50,000/- for job work carried out for another manufacturer of Rubber Rolls. The main contention was whether the processes undertaken by the appellant amounted to manufacturing, thereby making them liable to pay duty. The processes involved receiving perforated steel sheets, cutting them to dimension, bending, welding, and sand-blasting. The duty demand was under Heading 73.06 of the Central Excise Tariff, relating to other tubes, pipes, and hollow profiles.

The appellant argued that the processed sheets remained hollow profiles even after bending, welding, and sand-blasting, and that these processes did not result in the creation of a new article. It was contended that the processed profiles were used in the manufacture of rubber rolls and did not constitute manufacturing in themselves. Upon examination of the samples at various stages, the Tribunal found merit in the appellant's submissions. The perforated sheets received could be classified as hollow profiles, and even after bending and welding, they retained their hollow profile nature. Sand-blasting was considered a cleaning process and not manufacturing. As no new product emerged from the processes carried out by the appellant, the Tribunal concluded that there was no manufacturing involved, and therefore, no duty demand should be imposed.

Consequently, the duty demand of Rs. 7,85,773/- and the penalty of Rs. 50,000/- were set aside, and the appeal was allowed in favor of the appellant.