1999 (9) TMI 372 - AT - Central Excise

Summary

Issues Involved:
1. Whether the activities undertaken amount to manufacture.
2. Liability for duty and penalty on the appellants.

Issue 1: Whether the activities undertaken amount to manufacture:
The case involved a dispute regarding the classification of activities carried out by the appellants, specifically cutting, welding, and joining of duty-paid iron and steel products. The Commissioner had confirmed a demand of duty on a Small Scale Industrial Undertaking, Mascot, for these activities, considering them as manufacturing falling under Sub-heading No. 7308.90. However, the appellants argued that these activities did not amount to manufacture. The appellants relied on a recent judgment in the case of Elecon Engg. Co. Ltd. v. C.C.E., Chandigarh, where a similar issue was decided in favor of the appellant. The Tribunal agreed with the appellants' submissions, stating that the activities of cutting and joining duty-paid iron and steel products did not constitute manufacturing, as established by previous Tribunal judgments and High Court decisions.

Issue 2: Liability for duty and penalty on the appellants:
The Revenue contended that the appellants, including Mascot, were liable for duty and penalty as the structurals were brought into existence by Mascot, making them the manufacturers. The Revenue argued that the appellants were involved in getting the goods manufactured and cleared without paying duty, hence liable for penalty. However, the Tribunal disagreed with the Revenue's stance. It held that the activities undertaken by the appellants, such as cutting and welding duty-paid iron and steel products, did not amount to manufacturing. Therefore, the impugned order confirming duty demand on Mascot and imposing a penalty on the appellants was set aside, granting consequential relief to the appellants.

In conclusion, the Appellate Tribunal CEGAT, CALCUTTA, in the judgment delivered by Shri P.C. Jain and Smt. Archana Wadhwa, ruled in favor of the appellants, determining that the activities of cutting and joining duty-paid iron and steel products did not constitute manufacturing. The Tribunal set aside the duty demand on Mascot and the penalty imposed on the appellants, providing relief to the appellants based on the established legal precedent and interpretation of the activities involved.