1997 (7) TMI 250 - AT - Central Excise

Summary

Issues:
1. Interpretation of the term "manufacture" under Section 2(f) of the Central Excise Act, 1944.
2. Application of Rule 173H to the process of re-drawing duty paid copper rods, flats, bars, and strips.
3. Determination of whether the process of converting items into smaller dimensions amounts to manufacture.
4. Analysis of the distinction between rolled bars/rods and drawn bars/rods for excise duty purposes.
5. Consideration of Notification No. 174/84 and its applicability to the case.

Analysis:
The judgment involves a dispute regarding the classification of a process as "manufacture" under the Central Excise Act, 1944. The appellants argued that converting duty paid copper rods, flats, bars, and strips into smaller sizes does not constitute manufacture as it does not result in a new product emerging. They contended that the essence of manufacture is the creation of a new taxable article, which was not the case in their process. The lower authorities, however, held that further drawing of hot rolled rods/flats/bars amounted to manufacture and attracted duty under Notification No. 174/84.

The appellants emphasized that their activity only involved converting items into smaller sizes falling under the same tariff item, attracting the same rate of duty. They argued that the lower authorities incorrectly applied Notification No. 174/84 to their process. The judgment highlighted the distinction between rolled bars/rods and drawn bars/rods for excise duty purposes, noting that the tariff descriptions clearly differentiated between the two categories.

The Tribunal observed that the lower authorities focused on the differences between processes like rolling, drawing, and forging to determine whether a manufacturing process had occurred. However, the appellants' main contention was that they had merely converted duty paid copper rods/bars/strips into smaller sizes under the same tariff item. The Tribunal found that the extent to which the appellants had subjected the duty paid wrought bars/rods to further processing was not clarified. As a result, the case was remanded to the Assistant Commissioner for a detailed examination of the conversion process to determine if it amounted to manufacture and the applicability of the exemption under Notification No. 174/84.

In conclusion, the Tribunal allowed the appeal by remanding the case for a fresh examination, emphasizing the need to determine the extent of processing involved in converting the items into smaller dimensions and the applicability of the relevant excise duty provisions. The decision highlighted the importance of a thorough analysis of the manufacturing process to ascertain the applicability of excise duty regulations.