2011 (4) TMI 1120 - AT - Central Excise

Whether process of slitting of HR Coils amounted to manufacture Held that - in the case of Rajpurohit GMP India Ltd., (2008 - TMI - 31169 - SUPREME COURT) , slitting and cutting of steel sheets does not amount to manufacture, appeal filed by the Revenue rejected

Summary

Issues:
1. Whether the process of slitting Hot Rolled Steel Strips amounts to manufacture under Section 2(f) of the Central Excise Act, 1944.
2. Interpretation of Valuation Rules, 1975 for determining assessable value.
3. Applicability of previous tribunal decisions and Supreme Court rulings on similar issues.

Analysis:
1. The main issue in this case revolved around whether the process of slitting Hot Rolled Steel Strips constitutes manufacture under the Central Excise Act, 1944. The Revenue contended that the slitting process amounted to manufacture, requiring the appellant to determine assessable value under Valuation Rules, 1975. However, the Ld. Commissioner (Appeals) disagreed, citing a Tribunal decision that supported the view that slitting does not amount to manufacture. The Revenue challenged this decision, arguing that the Tribunal's reliance was misplaced due to an ongoing appeal in a similar case. The Tribunal, considering the Hon'ble Supreme Court's ruling in a related matter, held that slitting and cutting of steel sheets do not amount to manufacture. Therefore, the Tribunal rejected the Revenue's appeal based on the established legal precedent set by the apex Court.

2. Regarding the interpretation of Valuation Rules, 1975, the dispute arose from the differing views on whether the slitting process should trigger the application of these rules for determining the assessable value of the goods. The Revenue's position was that the appellant should have cleared the goods on payment of duty based on the valuation rules. However, the Tribunal's decision was guided by the Supreme Court's ruling, which clarified that slitting and cutting of steel sheets do not constitute manufacture. Consequently, the Tribunal did not find it necessary to delve into the intricacies of the Valuation Rules, as the core issue of whether slitting amounts to manufacture had already been settled by the apex Court.

3. The Tribunal's analysis also considered the applicability of previous tribunal decisions and Supreme Court rulings on similar issues. The Tribunal highlighted the relevance of a previous Tribunal decision and the ongoing appeal mentioned by the Revenue. However, the decisive factor in the Tribunal's judgment was the Supreme Court's clear pronouncement on the matter, which established a binding precedent. By aligning with the Supreme Court's interpretation, the Tribunal underscored the importance of adhering to established legal principles and authoritative rulings in resolving disputes related to the classification of processes under the Central Excise Act, 1944.