1999 (12) TMI 260 - AT - Central Excise

Summary

Issues involved:
1. Whether the process of coating M. S. Wires with Copper Sulphate amounts to manufacture.
2. Whether the extended period of limitation is invokable in the present case.

Analysis:
1. The appeal by M/s. Super Coaters (P) Ltd. questions if coating M. S. Wires with Copper Sulphate constitutes manufacturing and if the extended limitation period applies. The appellant argues that their process does not meet the definition of manufacture under Section 2(f) of the Central Excise Act. They rely on precedents like Bothra Metal Industries case, stating that certain processes do not amount to manufacture. The appellant contends that they disclosed their manufacturing process and product classification to the Department, making any alleged suppression or misdeclaration unfounded. They assert eligibility for Modvat credit and exemption under Notification No. 202/88-CE if their product is deemed excisable.

2. The Respondent argues that the appellants suppressed material facts by not disclosing the use of flux material in their product classification declaration, justifying the invokation of the extended limitation period. They claim that the process transforms M.S. wire into a distinct commodity, constituting manufacturing. Citing CCE v. D.K. Electricals Industries case, they argue that creating a new commercial commodity signifies manufacturing.

3. The Tribunal considers both arguments and references Supreme Court rulings to define 'manufacture' as the emergence of a new article with a distinctive name, character, or use. They emphasize that the transformation into a different commercial commodity triggers liability to duty. In this case, the M.S. wire becomes a distinct welding wire with a new name, character, and use, meeting the criteria for manufacturing. However, the Tribunal agrees with the appellant that the demand is time-barred, except for September 1989, as the appellants had properly declared their product and manufacturing process in 1988, precluding any allegations of suppression or misdeclaration. The Tribunal remands the matter regarding the benefit of Notification No. 202/88 to the Commissioner for further assessment.

4. The Tribunal concludes the appeal in line with the above analysis, acknowledging the manufacturing nature of the process while also recognizing the time limitations and the need for a detailed assessment of the exemption benefit under Notification No. 202/88.