1985 (4) TMI 287 - AT - Central Excise

Summary

Issues:
- Denial of exemption under Notification No. 83/83-Central Excises, dated 1-3-83 due to exceeding the stipulated ceiling limit of Rs. 25 lakhs in the preceding financial year.
- Classification of sawn timber as excisable goods and its impact on the total turnover ceiling for exemption eligibility.

Analysis:
1. The appellants were denied the exemption benefit based on their total clearances exceeding the prescribed limit. The appellants contested this denial, arguing that the value of their clearances should exclude sawn timber to fall below the Rs. 25 lakhs threshold for exemption eligibility.

2. The appellants presented their case, emphasizing that sawn timber was previously deemed non-excisable by the Tribunal in a related order. They clarified that their manufacturing process only involved producing rough sawn planks without further finishing operations to create distinct wood articles, supporting their claim to exclude sawn timber's value from the total clearances.

3. The Department's Representative contended that sawn timber should be considered a new excisable product, citing the Tribunal's decision regarding sawdust as a by-product of the sawing process. He urged the Bench to reconsider the classification of sawn timber and its inclusion in the total turnover ceiling for exemption determination.

4. The Tribunal scrutinized the arguments and rejected the Department's Representative's proposition that the creation of a new by-product necessitates the main product being classified as new. Drawing on the D.C.M. case precedent, the Tribunal emphasized that mere processing does not equate to manufacturing a new commodity unless a distinct transformation occurs, as highlighted by the example of raw vs. treated vegetable oil.

5. After careful consideration, the Tribunal upheld its previous finding that sawn timber, without further refinement into distinct articles, did not constitute a new excisable commodity. Sawing timber only alters its dimensions, retaining its fundamental nature as timber. Consequently, the Tribunal concurred with the appellants that sawn timber should not be considered for inclusion in the turnover ceiling calculation.

6. In conclusion, the Tribunal allowed the appeal, granting the appellants the exemption benefit if excluding the value of sawn timber clearances brought their total below the prescribed limit. The decision was based on the understanding that sawn timber, in its sawn form without additional processing, did not qualify as a new excisable item impacting the exemption eligibility criteria.