1984 (4) TMI 303 - AT - Central Excise

Summary

Issues:
1. Whether mixing antimony with lead constitutes manufacture for the purpose of Central Excise duty.
2. Whether the appellants engaged in manufacturing antimonial lead without holding an Excise license.
3. Whether duty is leviable on lead alloy obtained by mixing lead with antimony.
4. Whether the orders passed by the Collector of Central Excise are valid in light of the Circular and order from the Government of India and the Board of Excise and Customs.

Analysis:

Issue 1:
The appellants argued that mixing antimony with lead does not constitute manufacture as no new article emerges. They contended that the lead alloy obtained is still lead and not a distinct article. They relied on the fact that the material does not undergo a change in its essential nature and character before and after mixing with antimony.

Issue 2:
The Central Excise authorities alleged that the appellants engaged in manufacturing antimonial lead without the necessary Excise license through job workers. Show cause notices were issued demanding duty and penalty for the alleged manufacturing activity without the required license.

Issue 3:
The appellants provided duty paid lead and antimony to job workers for mixing, resulting in lead alloy with 0.85% antimony. The Tribunal considered the Explanation-1 of Tariff Item 27A, which includes lead alloy where lead predominates by weight over other metals. The Circular and order from the Government of India and the Board of Excise and Customs clarified the duty applicability on lead alloy obtained through mixing.

Issue 4:
The Tribunal noted that the Collector of Central Excise did not consider the orders passed by the Board in a quasi-judicial capacity, which held that the lead alloy obtained by mixing duty paid pig lead with antimony was not liable to duty. The Tribunal accepted the reasoning in the Circular and order, concluding that the preparation of lead ingots with antimony does not constitute manufacture assessable under T.I. 27A.

In conclusion, the Tribunal set aside the orders passed by the Collector of Central Excise and allowed the appeals based on the finding that mixing antimony with lead does not amount to manufacture for Central Excise duty purposes.