1990 (3) TMI 188 - AT - Central Excise

Summary

Issues:
- Whether the processes of straightening stainless steel wire and cutting it into required sizes amount to manufacture under Section 2(f) of the Central Excises & Salt Act, 1944?
- Whether a Central Excise license was required for the processes undertaken by the appellants?
- Whether Central Excise duty was payable on the Filler Wire cleared from the factory of the appellants?
- Whether the demand raised in the show cause notice was time-barred?
- Whether there was suppression of facts by the appellants?

Analysis:
1. The appellants were engaged in the manufacture of Filler Wire by straightening stainless steel wires and cutting them into required sizes without obtaining a Central Excise license. A show cause notice was issued for confiscation of seized Filler Wire, imposition of penalties, and recovery of duty. The Additional Collector held that the processes constituted manufacture under Section 2(f) of the Act and imposed penalties and duty.

2. The appellants argued that the processes did not amount to manufacture as there was no transformation into a new product. They cited various judgments, including those where it was held that certain processes like cutting timber or leather did not amount to manufacture as no new product emerged. The appellants contended that no duty was payable on the Filler Wire.

3. The appellants further argued that part of the demand was time-barred as the show cause notice was issued for a period dating back to 1978. They claimed that there was no suppression of facts as the Central Excise officers were aware of the processes undertaken at their factory.

4. The Departmental Representative supported the findings of the impugned order, asserting that the processes amounted to manufacture and duty was chargeable on the Filler Wire.

5. The Tribunal, after reviewing the case records and arguments, held that the processes of straightening and cutting stainless steel wire did not amount to manufacture under Section 2(f) of the Act. They relied on precedent judgments where it was established that mere processing without a new product emerging did not constitute manufacture. As the stainless steel wires remained the same after processing, no duty was chargeable on the Filler Wire.

6. Consequently, the impugned order was set aside, and the appeal was allowed in favor of the appellants. The Tribunal concluded that since no new product emerged from the processes undertaken, no Central Excise duty was applicable to the Filler Wire cleared by the appellants.