1988 (10) TMI 143 - AT - Central Excise

Summary

Issues:
- Whether the process of coating PVC on steel wires amounts to manufacture under Section 2(f) of the Central Excises and Salt Act, 1944.
- Whether the appellants can be held as manufacturers of PVC coated steel wire or are merely job workers.
- Whether the legal issues not raised before the Collector can be included in the appeal memorandum.

Analysis:

Issue 1:
The applicants argued that coating PVC on steel wires does not constitute manufacture as it does not change the name, character, or use of the steel wire. They cited the Bombay High Court judgment in Shakti Insulated Wires Pvt. Ltd. case to support their claim. The Tribunal found the process involved coating galvanized steel wires with PVC, which were then used in explosives manufacturing. The Tribunal determined that the process undertaken by the applicants qualifies as manufacture under Section 2(f) of the Act. The Tribunal emphasized that the facts were clear, and no further investigation was necessary to establish the manufacturing process.

Issue 2:
The applicants contended that they were job workers for IDL Chemicals Ltd., merely coating PVC on steel wires supplied by IDL Chemicals. They argued that the property in raw materials always remained with IDL Chemicals, making them the actual manufacturers liable for excise duty. The Tribunal considered the nature of the relationship between the appellants and IDL Chemicals, noting that the appellants were engaged in the manufacturing process on a job work basis. The Tribunal referred to various court decisions and held that the process undertaken by the appellants did not exempt them from being considered manufacturers. The Tribunal rejected the argument that the appellants were mere job workers.

Issue 3:
The applicants sought to include additional legal grounds in the appeal memorandum that were not raised before the Collector. The Tribunal considered whether these new grounds, which were purely legal issues, could be added to the appeal. The respondents argued against including these grounds, stating that they were not pure questions of law and required further investigation. The Tribunal, following Supreme Court precedents, allowed the inclusion of the new grounds, emphasizing that they related to the subject-matter before the Collector and were pure questions of law.

In conclusion, the Tribunal rejected the arguments against allowing the inclusion of new legal grounds in the appeal memorandum, emphasizing that the issues raised were pure questions of law and directly related to the subject-matter before the Collector. The Tribunal's decision highlighted the manufacturing process undertaken by the appellants and clarified that the new legal grounds could be raised before the Tribunal despite not being raised before the Collector, ensuring both parties' rights during the appeal hearing on merits.