1996 (4) TMI 178 - AT - Central Excise

Summary

Issues:
Classification of imported stainless steel electric resistance wires under Customs Tariff, Central Excise duty liability on imported material subjected to processes, determination of whether the process amounted to manufacture, applicability of previous judgments on similar issues.

Analysis:
The appeal involved the classification of imported stainless steel electric resistance wires under Heading 72.23 of the Customs Tariff. The appellants imported the wire for re-drawing and re-processing into lesser dimensions. They argued that the process of cold drawing did not amount to manufacture, and hence, Central Excise duty was not applicable. The department contended that the imported material underwent processes like pickling and annealing resulting in a new article with different characteristics. However, no evidence was presented to support this claim.

The Tribunal examined the submissions and evidence presented. It noted that the imported wire remained an electrical resistance wire even after cold drawing, albeit with reduced dimensions. The processes of pickling and annealing were found to be preparatory to cold drawing and integral to the overall process. The Tribunal relied on the decision in the case of Jyoti Engg. Corpn., which had been upheld by the Supreme Court, to conclude that the item was not excisable and not liable for duty. The Tribunal emphasized that no new commodity emerged from the processes applied, and thus, the duty was not chargeable.

The Department's representative highlighted the change in the wire's resistance due to cold drawing but failed to provide additional technical or commercial evidence to support the claim of a new commodity with different characteristics. The Tribunal found that the processes applied did not result in a commercially new article, as the wire retained its essential characteristics. Therefore, the Tribunal accepted the appeal based on the precedent set by the Jyoti Engg. Corpn. case and dismissed the duty liability.

In conclusion, the Tribunal ruled in favor of the appellant, holding that the imported stainless steel electric resistance wires were not excisable and not subject to duty. The decision was based on the lack of evidence showing the emergence of a new commodity after the processes applied, in line with the precedent established by previous judgments.