1985 (1) TMI 322 - AT - Central Excise

Summary

Issues:
1. Whether the drawing of bright bars from duty paid round bars amounts to manufacture.
2. Whether the value of bright bars and bright bar scraps should be excluded from the aggregate value of clearances.
3. Interpretation of Notification No. 80/80 regarding the exemption of excisable goods.
4. Whether clearances of exempted goods should be included in determining the aggregate value of clearances.
5. Application of Explanation IV of Notification No. 80/80.
6. Whether the term "cleared" includes goods cleared on payment of duty and exempted goods.
7. Whether the appellants are entitled to reduction of insurance and freight amounts from the aggregate value of clearances.
8. Imposition of penalty on the appellants for alleged suppression of facts.

Analysis:
1. The Tribunal considered whether the drawing of bright bars from round bars constitutes manufacturing. The Tribunal held that the process resulted in a transformation, creating a new product known commercially as "bright bar," which had distinct characteristics from round bars. The Tribunal concluded that the conversion amounted to manufacture based on the Supreme Court's definition of manufacture.

2. The appellants argued that the value of bright bars and scraps should be excluded from the total clearances to qualify for an exemption under Notification No. 80/80. However, the Tribunal rejected this argument, stating that the bright bars and scraps were excisable items and could not be excluded from the aggregate value of clearances.

3. The Tribunal interpreted Notification No. 80/80, which exempts specified goods up to a certain value. The appellants contended that exempted goods should be excluded from the total clearances, but the Tribunal disagreed, citing previous decisions that exempted goods are still considered excisable.

4. The Tribunal addressed whether clearances of exempted goods should be included in determining the aggregate value of clearances. Relying on precedent, the Tribunal concluded that exempted goods are still considered excisable and should not be excluded from the calculation.

5. The Tribunal analyzed the application of Explanation IV of Notification No. 80/80, which specifies that clearances of exempted goods should not be considered. The Tribunal clarified that the term "specified goods" in the notification refers to excisable goods listed in the Table annexed to the notification.

6. The Tribunal discussed whether the term "cleared" includes goods cleared on payment of duty and exempted goods. The Tribunal determined that the term "cleared" encompasses removal of goods with or without payment of duty, rejecting the argument that it only applies to goods cleared on payment of duty.

7. The Tribunal considered the appellants' request to deduct insurance and freight amounts from the aggregate value of clearances. While allowing the deduction of insurance premium, the Tribunal rejected the deduction for freight due to lack of supporting documentation.

8. Regarding the penalty imposed on the appellants for alleged suppression of facts, the Tribunal found no deliberate concealment by the appellants. The Tribunal noted that the appellants had filed necessary documents and claimed the exemption in good faith. Consequently, the Tribunal set aside the penalty, ruling in favor of the appellants.