1999 (11) TMI 182 - AT - Central Excise

Summary

Issues Involved:
Whether M/s. Northern Steels Pvt. Ltd. manufactured machinery parts/components classifiable under Chapter 84/85 of the Schedule to the Central Excise Tariff Act and Tariff Item 68 of the erstwhile Central Excise Tariff (for the period prior to 28-2-1986).

1. Manufacture of Machinery Parts/Components:
The issue in these appeals is whether M/s. Northern Steels Pvt. Ltd. manufactured machinery parts/components classifiable under specific Tariff Items. The appellant argued that they only manufactured Cast Iron Castings and had no facility for complete machinery of the castings except for certain processes. They contended that they cleared unmachined castings and supplied them to independent job workers for machining. The appellant relied on various decisions to support their classification under a specific heading in the Central Excise Tariff Act.

2. Role of Appellant No. 2:
The advocate for appellant No. 2 argued that he had no role in the alleged offense and had performed assigned duties as the Manager of appellant No. 1. He maintained Central Excise Records as per approved classification lists and disputed the findings of the Collector that the entire affair was planned and executed by him without evidence.

3. Revenue's Position and Allegations:
The Revenue emphasized that the appellants were manufacturing various machinery parts/components as per customer specifications. They argued that the appellants were supplying machine parts to customers, not castings, and that job workers were involved in machining processes as per drawings and specifications provided by the appellants. The Revenue contended that the appellants had suppressed facts by not informing the Department about the manufacture of machinery parts, invoking the extended period of limitation.

4. Judgment and Legal Analysis:
The tribunal held that castings are distinct from parts and classified differently. They cited precedents to establish that when castings are converted into machine parts/components by job workers, the job workers become the manufacturers liable for duty, not the original suppliers. The tribunal concluded that the appellants would be liable to pay duty only on castings, not on the machine parts/components manufactured by job workers. The tribunal also addressed the issue of penalty imposition, setting it aside based on the circumstances of the case.

5. Decision and Outcome:
The tribunal allowed the appeal filed by one individual and remanded the appeal filed by M/s. Northern Steel to the competent Adjudicating Authority to compute the duty liability of appellant No. 1 based on the tribunal's findings. The tribunal clarified the liability for duty payment on the appellants and emphasized the distinction between castings and machine parts/components in determining duty obligations.

This detailed analysis of the judgment provides a comprehensive overview of the legal issues, arguments presented, and the tribunal's decision in the case.