1999 (2) TMI 115 - AT - Central Excise

Summary

Issues:
1. Classification of electrical resistance wires under Central Excise Tariff.
2. Whether the process of redrawing thicker gauge wire amounts to manufacture.
3. Correct classification of the goods under Tariff Items.
4. Time bar for demanding duty.

Issue 1: Classification of electrical resistance wires under Central Excise Tariff:
The appellants contested the order confirming a differential duty demand on electrical resistance wires drawn into thinner gauge, arguing that the goods should have been classified under Tariff Item 26AA as "steel wires" instead of Tariff Item 33B(ii) as "electric wires." They relied on definitions of conductors and wires to support their contention that the goods were resistance wires, not electric wires. The Tribunal's decision in a similar case was cited to differentiate between electrical resistance wires and electric wires. The appellants also argued that a circular from the Board supported their classification. The respondent, however, maintained that the goods were correctly classified under Tariff Item 33B. The Tribunal analyzed the definitions provided and previous decisions, ultimately siding with the appellants and holding that the goods were not electric wires but resistance wires, classifiable under Tariff Item 26AA.

Issue 2: Whether the process of redrawing thicker gauge wire amounts to manufacture:
The appellants further contended that the process of redrawing thicker gauge wire into thinner gauge did not amount to manufacture as no new excisable commodity emerged. They referenced a previous Tribunal decision to support their argument. The Tribunal agreed with the appellants, stating that even after cold drawing, the wire remained an electrical resistance wire, and no new commodity emerged. Therefore, the process carried out by the appellants was not considered a manufacturing process giving rise to a new excisable commodity liable to duty.

Issue 3: Correct classification of the goods under Tariff Items:
The appellants also argued that the entire demand was time-barred, as the Department had been aware of the nature of the goods since 1978, and there was no suppression of facts. They provided evidence of correspondence and reports detailing the description of the goods and raw materials. The respondent, however, alleged deliberate misdeclaration and suppression of information to justify the extended period of limitation. The Tribunal reviewed the history of communication between the parties and concluded that the demand was indeed time-barred due to the information provided by the appellants over the years.

Judgment:
In conclusion, the Tribunal ruled in favor of the appellants on both the merits of classification and the time bar for demanding duty. The duty demand was set aside, considering that the process of redrawing wire did not constitute manufacture and that the demand was barred by limitation based on the information provided to the Department over the years. The impugned order was overturned, and the appeal was allowed in favor of the appellants.