1992 (7) TMI 187 - AT - Central Excise

Summary

Issues:
1. Whether the process of turning of steel bars and tubes amounts to manufacture under the Central Excises & Salt Act, 1944.
2. Whether the Collector's review order correctly classified the processed products under Item 68 CET.
3. Whether the Assistant Collector's decision to grant a refund to the appellants was legally sound.

Analysis:

Issue 1:
The appeal challenged the order passed by the Collector of Central Excise & Customs, Jaipur, regarding the classification of the process of turning steel bars and tubes. The Assistant Collector initially accepted the appellants' contention that the turning process did not result in a new commodity and hence no duty was leviable under Item 68 CET. However, the Collector in the review order held that the turning process amounted to manufacturing, converting rough products into processed goods. The Tribunal referred to precedents like ACC Bebcock Ltd. v. Collector of Central Excise and Bharat Forge & Press Industries (P) Ltd. v. Collector of Central Excise to support the appellants' claim that the processed goods continued to fall under Item 26AA CET, as they did not transform into new products known differently in the market.

Issue 2:
The argument presented by the appellants' counsel emphasized that the processes undertaken did not result in the emergence of a new product, citing relevant case law. The counsel contended that the Assistant Collector's decision was based on factual considerations and should not be overturned unless patently incorrect, illegal, or improper. On the other hand, the Respondent argued that the turning, sizing, and polishing processes created new products with distinct identities, justifying the Collector's review order. However, the Tribunal found that the Department failed to prove that the processed goods were known differently in the market post-turning, supporting the appellants' claim that the processed goods remained tubes and bars, not new commodities.

Issue 3:
The Tribunal addressed the power of review vested in the Collector under the Central Excises & Salt Act, emphasizing that the review power was intended for superintendence over subordinate adjudication orders. In this case, the Collector's review was deemed appropriate as it aimed to ensure the legality, propriety, and correctness of the Assistant Collector's decision. Ultimately, the Tribunal found merit in the appeal, setting aside the impugned order and allowing the appeal in favor of the appellants.

In conclusion, the Tribunal ruled in favor of the appellants, holding that the processed goods did not amount to new commodities post-turning, and thus, no duty was leviable under Item 68 CET. The decision highlighted the importance of factual considerations in determining the classification of manufactured goods under the Central Excises & Salt Act, 1944.