1984 (8) TMI 333 - AT - Central Excise

Summary

Issues: Interpretation of Notification No. 178/77 regarding the classification of Wooden Drums as inputs in the manufacture of Electric Wires and Cables.

In this case, the Appellate Tribunal CEGAT, New Delhi, addressed a revision application under Section 36 of the Central Excises and Salt Act, 1944, against an order passed by the Appellate Collector of Central Excise and Customs. The primary issue revolved around the interpretation of Notification No. 178/77 and whether Wooden Drums used in the manufacture of Electric Wires and Cables should be considered as inputs. The Assistant Collector initially denied duty exemption on the wooden drums, stating they were not integral to the manufacturing process of wires and cables but merely facilitated it. The Appellate Collector upheld this decision, leading to the appeal. The appellant argued that the drums were essential for manufacturing, selling, and transporting wires and cables, contrary to the lower authorities' findings. The appellant's counsel highlighted precedents where similar items were considered inputs. The Tribunal ultimately agreed with the appellant, ruling that the wooden drums should be treated as inputs under Notification 178/77, thereby allowing the appeal.

The Assistant Collector's order emphasized that the wooden drums, after being used for electric wires and cables, became waste material and were not integral to the manufacturing process. The Appellate Collector concurred with this view, leading to the appellant's appeal. The appellant contended that the drums were crucial for manufacturing, selling, and transporting wires and cables, contrary to the lower authorities' findings. The appellant's counsel referenced past tribunal decisions where similar items were classified as inputs, supporting their argument. The Tribunal, after considering the arguments and precedents cited, concluded that the wooden drums should indeed be treated as inputs under Notification 178/77. Consequently, the impugned order was set aside, and the appeal was allowed.

During the proceedings, the appellant's counsel pointed out Notification No. 178/77's language exempting goods on which excise duty is leviable if goods falling under Item 68 of the First Schedule to the Act have been used in their manufacture. The Assistant Collector's order acknowledged the drums' role in the manufacturing process of wires and cables, from stranding to final packaging. The Tribunal referenced previous cases where duty paid drums were considered inputs, supporting the appellant's position. The Senior Departmental Representative sought clarification on whether the exemption applied only to drums cleared with cables, which was confirmed. The Tribunal agreed with the appellant's arguments, stating that the wooden drums should be classified as inputs under Notification 178/77, thereby overturning the lower authorities' decision and allowing the appeal.