1991 (11) TMI 56 - HC - Central Excise

Summary

Issues:
Challenge to concurrent findings under the Excise Act regarding exemption notification and excise duty valuation.

Analysis:
The petitioners, a Public Limited Company manufacturing copper based alloy wires, challenged the authorities' findings under the Excise Act. Initially exempt from excise duty, the petitioners became liable under Tariff Item No. 68 from March 1, 1975. An exemption notification on April 30, 1975, allowed duty exemption for goods manufactured as job work. The dispute arose when the authorities claimed the petitioners were not entitled to the exemption due to the manufacturing process altering the raw materials significantly. The Central Government upheld the authorities' decisions, stating the petitioners did not merely perform job work but transformed scrap material into specific alloys before manufacturing wires.

The petitioners argued that their process should be considered job work and cited previous court decisions supporting their position. However, the court disagreed, emphasizing that the petitioners' process of converting scrap material into specific alloys before manufacturing wires did not align with the definition of job work under the exemption notification. The court clarified that job work should not alter the character of the original material supplied significantly. As the petitioners' process involved substantial transformation of the raw materials, they were not entitled to the exemption.

Regarding excise duty valuation, the petitioners contended that only the value paid by customers for the work undertaken should be considered. They relied on a court decision that excluded raw material costs from duty calculation. However, the court differentiated the present case, where the petitioners transformed scrap material into raw material before manufacturing wires. As the raw material was created through the petitioners' process, the court upheld the authorities' decision to consider the value of raw materials in duty calculation. Additionally, the court noted that this argument was raised for the first time in the petition and lacked merit.

Ultimately, the court dismissed the petition, upholding the authorities' decisions regarding the exemption notification and excise duty valuation. The petitioners' request for an interim order continuation was refused, and costs were imposed on the petitioners.