2008 (4) TMI 105 - AT - Central Excise

Respondents received duty paid MS angles, MS Rods, MS Plates and MS Channels - process of cuffing of the above duty paid angles, rods, plates and channels as per specification and then drilling of holes to the cut pieces to facilitate fastening with bolts and nuts while erecting towers impugned process do not amount to manufacture as the MS rods, plates, angles, etc. remain the same even after the process have been carried out no manufacture duty liability not arise

Summary

Issues:
Classification of MS angles, rods, plates, and channels under Tariff heading 73.08; Whether the items cleared by the Respondents are dutiable and excisable; Whether the process undertaken by the Respondents amounts to manufacture.

Classification Issue:
The Respondents received duty paid MS angles, rods, plates, and channels classified under Tariff heading 73.08. They processed these items by cutting, drilling holes, and galvanization for tower erection. The lower authority classified them as parts of structures under tariff heading 7308.90, holding them liable for Excise duty. However, the Commissioner (Appeals) concluded that the fabricated parts are not dutiable, based on judicial decisions. The Revenue appealed to the Tribunal, disputing the Commissioner's decision.

Manufacture Issue:
The Revenue argued that structures and parts of structures are excisable if they are new, identifiable goods resulting from manufacture and marketable. They cited a Supreme Court case and a decision by a Larger Bench. The Respondents contended that cutting, punching holes, and galvanization do not amount to manufacture, citing various Supreme Court decisions and tribunal rulings. They emphasized that the process does not transform the goods into new products with distinct characteristics.

Judicial Precedents:
The Respondents' advocate referenced several case laws to support the argument that the process undertaken does not constitute manufacture. These included decisions from the Supreme Court and various tribunals, highlighting that the mere cutting and processing of the materials do not change their essential nature or create new products with unique identities.

Tribunal's Decision:
After careful consideration, the Tribunal found that the process undertaken by the Respondents, involving drilling holes and cutting the materials, did not amount to manufacturing. The MS rods, plates, angles, etc., retained their original form and purpose after processing, with no new manufacturing process involved. Therefore, the Tribunal upheld the Commissioner (Appeals)'s decision, rejecting the Revenue's appeals as lacking merit.

Conclusion:
The Tribunal's judgment clarified the classification of the processed items, the definition of manufacture in this context, and the application of relevant legal precedents. The decision emphasized that the process undertaken by the Respondents did not result in the creation of new, distinct products, leading to the rejection of the Revenue's appeals.