2017 (2) TMI 1163 - AT - Central Excise

Manufacture - whether the the respondent s activity of cutting, stamping and packing from coil to the pieces amounts to manufacture? - Held that - the activity is confined to cutting of wire from coil form. Even though it is stamped and packed the activity does not amounts to manufacture. Mere straightening of stainless steel wire and cutting into required sizes does not amount to manufacture - In the present case also the similar activity have been carried out by the respondents - demand not sustainable. Appeal dismissed - decided against Revenue.

Summary

Issues:
Classification of goods for excise duty - Cutting, stamping, and packing stainless steel wire into pieces - Whether amounts to manufacture - Liability for excise duty.

Analysis:
The case involved the classification of goods for excise duty, specifically focusing on the activity of cutting, stamping, and packing stainless steel wire into pieces. The excise duty demand was initially confirmed based on the argument that these activities amounted to manufacturing, thereby making the goods liable for excise duty. The respondent appealed before the Commissioner (Appeals), who allowed the appeal, setting aside the original order. The revenue then appealed this decision. The key contention was whether the process of cutting the wire into pieces constituted manufacturing, leading to a change in the classification of the goods for excise duty purposes.

The Assistant Commissioner representing the revenue argued that the cutting, stamping, and packing of the stainless steel wire resulted in the creation of a distinct commodity, separate from the wire in coil form, and therefore, should be classified differently for excise duty. It was emphasized that the goods were not sold in the market in coil form but as individual pieces, stamped and packed, indicating a transformation that warranted a new classification. The revenue contended that after the various processes, the goods acquired a different identity, justifying the imposition of excise duty on the new commodity.

Upon careful consideration of the submissions from both sides and a review of the records, the Tribunal analyzed the legal provisions and previous judgments cited in the case. The Tribunal noted that the core issue revolved around whether the activity of cutting stainless steel wire into required sizes constituted manufacturing, leading to the emergence of a new excisable commodity. The Commissioner (Appeals) had referenced relevant case laws and legal provisions to conclude that the mere cutting and processing of the wire did not result in the creation of a new product. Drawing parallels with previous judgments regarding similar activities on different materials, the Tribunal found that the process of cutting the wire did not amount to manufacturing, as no new product emerged from the activity.

Ultimately, the Tribunal upheld the decision of the Commissioner (Appeals), dismissing the revenue's appeal. The judgment highlighted that the activity of cutting the stainless steel wire into pieces did not meet the threshold for manufacturing under excise duty laws, as established by legal precedents and the lack of emergence of a new product from the process. The case underscored the importance of assessing whether a substantial transformation had occurred to warrant a change in the classification of goods for excise duty purposes.