1988 (8) TMI 246 - AT - Central Excise

Summary

Issues Involved:
1. Whether the fabrication of columns, purlins, bracings, rafters, and other items amounts to "manufacture" u/s Central Excise Act.
2. Applicability of previous judgments and precedents to the present case.
3. Determination of whether the processes undertaken by the appellant constitute mere assembly or actual manufacture.

Summary:

Issue 1: Whether the fabrication of columns, purlins, bracings, rafters, and other items amounts to "manufacture" u/s Central Excise Act.

The appellant company was engaged in fabricating columns, purlins, bracings, rafters, and other items required for erection from duty-paid iron and steel products. The Assistant Collector held that these processes amounted to "manufacture" as the resultant goods had distinct names, characters, and uses different from the raw materials. The processes involved included templating, cutting, drilling, assembly, welding, bending, painting, and marketing, with some operations completed at the site. The Assistant Collector concluded that the items fabricated could not be regarded as semi-manufactured materials but were in fully finished and identifiable conditions. The Collector (Appeals) upheld this view, leading to the present appeal.

Issue 2: Applicability of previous judgments and precedents to the present case.

The appellant cited several judgments, including Aruna Industries Vishakapatnam and Others v. Collector of Central Excise, Guntur, arguing that similar facts should lead to a similar conclusion. However, the Tribunal found that the facts in Aruna Industries were different as the contracts there involved construction, fabrication, and erection on-site, whereas in the present case, the fabrication was done in the appellant's factory and then sent to the site. The Tribunal also referenced Structurals and Machineries (Bokaro) Pvt. Ltd. v. Collector of Central Excise, Patna, where it was held that the fabrication of structurals amounted to manufacture.

Issue 3: Determination of whether the processes undertaken by the appellant constitute mere assembly or actual manufacture.

The Tribunal examined the processes undertaken by the appellant, which included cutting, welding, drilling, and assembly, and concluded that these were not simple processes but a series of complicated operations resulting in the manufacture of end-products. The Tribunal referred to the Supreme Court's judgment in Empire Industries Limited and Others v. Union of India and Others, which stated that to constitute manufacture, it is sufficient if the transformation results in a commercially different commodity with a distinct character, use, and name. Applying these principles, the Tribunal found that the activities undertaken by the appellant clearly amounted to manufacture.

Conclusion:

The Tribunal dismissed the appeal, affirming that the fabrication processes undertaken by the appellant constituted "manufacture" u/s Central Excise Act, and upheld the orders of the Assistant Collector and the Collector (Appeals).