1997 (11) TMI 273 - AT - Central Excise

Summary

Issues:
- Confirmation of confiscation of copper strips
- Duty demand on clearance of copper strips and copper flats/rods
- Imposition of penalty
- Allegation of manufacturing and clearing copper strips without license
- Denial of charges based on manufacturing process
- Claim of exemption under Notification No. 61/83
- Time bar for demands
- Interpretation of process of manufacture
- Comparison with relevant case laws

Analysis:
The appeal before the Appellate Tribunal arose from an Order-in-Original confirming the confiscation of copper strips, duty demand, and imposition of a penalty by the Additional Collector of Central Excise. The appellants were charged with manufacturing and clearing copper strips without the necessary license and compliance with Central Excise law. The appellants argued that the processes undertaken did not amount to manufacturing as per Section 2(f) of the Central Excises and Salt Act, and they had filed a declaration in 1986 disclosing manufacturing details. They also claimed exemption under Notification No. 61/83 and contended that the demands were time-barred due to the declaration filed in 1986. However, the Additional Collector rejected these arguments, holding that the processes added value and created a new article, constituting manufacturing. The plea for the benefit of the notification and the time bar was also dismissed.

The appellant's advocate referenced the Supreme Court's decision in Collector of Central Excise v. Steel Strips Ltd., where it was held that certain processes did not amount to manufacturing. Additionally, judgments from Tribunal cases were cited to support the argument that the processes undertaken did not result in the creation of a new commodity. The Tribunal cases highlighted that certain processes, such as drawing for reduction of cross-sectional area/thickness or stainless steel wire drawing, did not amount to manufacturing. The advocate argued that the processes in question did not lead to the emergence of a new commodity, aligning with the principles established in the cited cases.

The Departmental Representative supported the Additional Collector's order, asserting that the processes constituted manufacturing. However, upon careful consideration, the Tribunal found that the processes undertaken by the appellants were similar to those discussed in the referenced judgments. These processes were deemed not to result in the creation of a new commodity, as the goods remained classifiable under the same tariff heading. Moreover, the appellants had filed a declaration in 1984, and the show cause notice was issued in 1987, indicating no suppression of facts. Therefore, based on the precedents and the lack of a new commodity emerging from the processes, the Tribunal set aside the impugned order, allowing the appeal with any consequential relief as per law.