2006 (8) TMI 426 - AT - Central Excise

Summary

Issues:
1. Whether the process of stranding amounts to manufacture.
2. Liability of the appellants for duty demand, interest, and penalties.

Analysis:
1. Process of Stranding as Manufacture:
The case revolved around the question of whether the process of stranding amounts to manufacture. The Commissioner held that stranding constitutes manufacture as it transforms galvanized single wire into galvanized stranded wire, which has distinct characteristics, utility, and marketability. The Commissioner relied on previous decisions and specific tariff entries to support this conclusion. The appellants argued that the stranding process did not amount to manufacture based on Supreme Court decisions and circulars. However, the Commissioner found these arguments irrelevant to the specific facts of the case and upheld that stranding indeed constitutes manufacture.

2. Liability of the Appellants:
The appellants contended that they did not directly undertake the stranding process, as it was done by job workers who were registered SSI units. They highlighted payments made to job workers and compliance with excise rules. However, the Commissioner found discrepancies in the appellants' balance sheet and job work expenses, indicating inconsistencies in their claims. The Commissioner also cited the admission of the company's Managing Director regarding the production and supply of stranded wire without duty payment. Consequently, the Commissioner upheld the duty demand, interest, and penalties imposed on the appellants, with a partial reduction in the penalty amount.

In conclusion, the Appellate Tribunal upheld the Order-in-Original, affirming that the process of stranding amounts to manufacture and holding the appellants liable for duty demands, interest, and penalties. The Tribunal found the Commissioner's decision well-founded based on the specific facts and evidence presented, ultimately ruling in favor of the Revenue. The judgment highlighted the importance of compliance with excise laws and the need for accurate documentation to support claims in such cases.