1999 (4) TMI 301 - AT - Central Excise

Summary

Issues:
1. Whether the process of cutting, drilling, and welding of MS steel materials to make pre-fabricated buildings amounts to manufacture under Section 2(f) of the C.E. Act, 1944.
2. Whether the items are classifiable under Chapter Heading 9406.00.
3. Whether the fabrication of structures would amount to manufacture and attract duty liability under sub-heading 7308.90 of the CET.

Issue 1:
The appeal involved the question of whether the process of cutting, drilling, and welding of MS steel materials to create pre-fabricated buildings constitutes manufacturing under Section 2(f) of the C.E. Act, 1944. The appellants argued that the process did not amount to manufacturing and cited relevant cases to support their position. The adjudicating authority, however, did not engage in a legal battle to determine if the process constituted manufacturing and classified the items under Chapter 9406.00 based solely on the tariff heading. The appellants contended that previous tribunal decisions and case law supported their stance that the activities in question did not result in the emergence of a new commodity. They also argued against the imposition of duty based solely on the classification under Heading 94.06 of the CET and claimed that the demand was time-barred.

Issue 2:
The second appeal revolved around the question of whether the fabrication of structures would amount to manufacturing and attract duty liability under sub-heading 7308.90 of the CET. The Collector (Appeals) had upheld the original authority's decision that fabrication of structures constituted manufacturing and attracted duty liability. The appellants pointed out that the issue had been previously decided in their favor in their own case and cited tribunal decisions that supported their position. The tribunal noted that previous decisions had established that certain items, such as trestles and structures used for construction, did not amount to manufacturing merely because they were mentioned under a specific tariff heading. Relying on the precedent set by these decisions, the tribunal set aside the impugned orders and allowed the appeals in favor of the appellants.

In summary, the appellate tribunal, in a judgment involving two appeals with common questions of law and facts, addressed the issues of whether the process of cutting, drilling, and welding of MS steel materials for pre-fabricated buildings constituted manufacturing and if the items were classifiable under specific chapters. The tribunal also considered whether the fabrication of structures amounted to manufacturing and attracted duty liability. By analyzing relevant case law and tribunal decisions, the tribunal ruled in favor of the appellants, setting aside the impugned orders and allowing the appeals with consequential relief as per law.