1997 (11) TMI 277 - AT - Central Excise

Summary

Issues:
1. Whether the process of welding pipes of different dimensions amounts to the process of manufacture?
2. Whether the items produced through the welding process are dutiable under the Central Excise Act?
3. Whether the appellants are liable to pay the demanded duty and penalty imposed by the Additional Collector?
4. Whether the appellants' appeal should be allowed based on the precedent set by the Hon'ble Supreme Court in a similar case?

Analysis:
1. The appeal arose from an Order-in-Original confirming a demand and imposing a penalty on the appellants for the process of welding pipes of different dimensions, which the Additional Collector deemed as manufacturing steel poles. The Additional Collector found the items marketable and identifiable as goods, leading to duty confirmation and penalty imposition under the Central Excise Act.

2. The appellants argued that the welding process did not amount to manufacturing a new product, citing a Supreme Court judgment that mere changes in length, size, or shape do not create a new product. They contended that the items produced remained within the same species as the original pipes and tubes, which was supported by the Collector (Appeals) dropping proceedings for an earlier period based on similar grounds.

3. The Department, represented by the learned DR, reiterated the Additional Collector's view supporting the duty demand and penalty imposition on the appellants for the welding process.

4. The Tribunal, after considering both parties' submissions, allowed the stay application, dispensed with the pre-deposit, and set aside the impugned order. Relying on the Supreme Court judgment cited by the appellants, the Tribunal held that the welding process undertaken by the appellants did not result in the manufacture of new goods for excisability and dutiability purposes. The Tribunal, in line with the precedent, concluded that the items produced through welding did not attract duty liability, leading to the allowance of the appeal.

This comprehensive analysis of the judgment highlights the key issues, arguments presented by the parties, legal interpretations, and the final decision rendered by the Appellate Tribunal CEGAT, New Delhi.