2008 (8) TMI 610 - AT - Central Excise

Summary

Issues involved: Determination of whether the process of drawing/re-drawing of pipes/tubes amounts to manufacture prior to 1-3-1997, in light of Chapter Note No. 3 introduced to Chapter 73.

Issue 1: Interpretation of Chapter Note No. 3 to Chapter 73

The Appellate Tribunal CESTAT, Ahmedabad considered whether the process of drawing/re-drawing of pipes/tubes constitutes manufacturing activity prior to 1-3-1997, when Chapter Note No. 3 was introduced to Chapter 73. The lower authorities had ruled against the appellant, stating that the introduction of the Chapter Note was clarificatory and the activities fell under the definition of manufacture in Section 2(f) of the Central Excise Act, 1944. However, the Tribunal disagreed with this reasoning, emphasizing that the Chapter Note explicitly states that the processes of drawing or redrawing "SHALL" amount to manufacture in relation to certain pipes and tubes. It was clarified that this Chapter Note extended the ordinary meaning of manufacturing as defined in Section 2(f) and only applied from its introduction date of 1-3-1997, not retroactively.

Issue 2: Comparison with Previous Decisions and Circulars

The appellant's advocate cited a Tribunal decision and a Supreme Court ruling which held that drawing wire from wire rods does not constitute manufacturing activity. Additionally, a circular issued by the Board supported this interpretation. The Tribunal agreed with the advocate's argument that the principle involved in drawing/redrawing wires or pipes and tubes aligns with the decisions and circular mentioned. Consequently, the impugned order was set aside, and the appeal was allowed with consequential relief.