1985 (6) TMI 190 - AT - Central Excise

Summary

Issues:
Classification under Notification No. 119/75-C.E. for job work done on spring steel flats.

Analysis:
1. The case involved M/s. Unik Springs (India) claiming duty concession under Notification No. 119/75 for job work on spring steel flats. The appellants argued that the job work involved cutting, drilling, and heat treatment on flat steel bars, returned in loose condition to suppliers.

2. The Notification exempted duty on goods manufactured as job work, based on charges for the job work. The dispute arose as the department contended that the value of raw material should be added to job charges for duty payment, a stance upheld by lower authorities.

3. The appellants cited precedents like Anup Engineering Ltd. and Madura Coats Limited cases to support their claim. They argued that the job work did not result in a new article, thus qualifying for the duty concession under the Notification.

4. The department maintained that the job work transformed the flat bars into a new product, leaf springs, not eligible for the duty exemption. They relied on the Delhi High Court's decision in Metal Forgings Pvt. Ltd. case to support their position.

5. The Tribunal analyzed various High Court decisions and its own rulings to interpret the scope of Notification No. 119/75. The Tribunal emphasized that the job work should not result in a complete transformation of the original material to lose its essential identity for duty exemption eligibility.

6. The Tribunal found that the processes undertaken by M/s. Unik Springs did not completely alter the flat steel bars' identity, making them eligible for the duty concession under the Notification. The order of the Collector of Central Excise (Appeals) was set aside, and the appeal was allowed in favor of the appellants.