2017 (3) TMI 238 - AT - Central Excise

Manufacture - activity of conversion of bare copper wire to winding wire by enamel insulation process - Held that - drawing, cutting of the wire does not amount to manufacture at the relevant time - since the activity carried out by the appellant does not amount to manufacture no duty can be demanded from the appellant. Time limitation - job-work - Held that - since the entire activity of supplying the bare copper wire by M/s. Crompton Greaves Ltd to the appellant and the process carried out by the appellant was very much in the knowledge of the department, there is no suppression of facts on the part of the appellant - demand is hit by limitation. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Whether the process of insulation of copper wire and enameled wire amounts to manufacture?
2. Whether the duty liability for job work under Notification No. 214/86 shifts to the principal manufacturer?
3. Whether there was any suppression of facts on the part of the appellant?
4. Whether the demand for duty is barred by limitation?

Analysis:

Issue 1:
The Tribunal considered whether the insulation process of copper wire and enameled wire amounts to manufacturing. It was held that the activity does not amount to manufacture based on precedents such as Shakti Insulated wires Pvt Limited v. Union of India and others [1982(10) ELT 10(Bom.)]. The Tribunal also referred to various judgments supporting the appellant's contention that activities like drawing and cutting of wire do not constitute manufacturing.

Issue 2:
Regarding the duty liability for job work under Notification No. 214/86, the Tribunal ruled that the liability shifts to the principal manufacturer, M/s. Crompton Greaves Ltd, who supplied the input materials. Citing relevant judgments, the Tribunal emphasized that the principal manufacturer is responsible for paying excise duty in cases of job work under the said notification.

Issue 3:
The appellant argued that there was no suppression of facts on their part, as the entire process was known to the department. The Tribunal agreed with this assertion, citing judgments like Commissioner of C. Ex. Ahmedabad v. Satia & Company [2010(262) ELT 530(Tri. Ahmd.)] and Adarsh Udyog v. Commissioner of Central excise, Panchkula [2012(280) ELT 118(Tri. Del.)].

Issue 4:
The Tribunal did not delve into the issue of limitation as the matter was decided on its merits. Given the findings on the above issues, the impugned order demanding duty from the appellant was set aside, and the appeals were allowed.

This detailed analysis of the judgment highlights the key legal arguments, precedents, and conclusions reached by the Tribunal on each issue involved in the case.