2000 (3) TMI 297 - AT - Central Excise

Summary

Issues:
- Whether the fabrication of centering involving cutting of steel plates and angles, fitting, welding, and drilling would amount to "manufacture" for the purpose of levying duty.
- Whether the activities undertaken by the appellant constitute manufacturing activity leading to duty liability.
- Whether the invocation of the larger period for duty assessment is justified due to non-availability of Central Excise license and lack of relevant information provided by the appellant.

Analysis:
1. The core issue in this appeal revolves around determining whether the fabrication activities performed by the appellant, involving cutting, welding, and shaping of steel plates and angles, amount to "manufacture" under the Central Excise law. The appellant argued that the fabrication of truss members does not result in a new product with a distinct identity, character, and use, hence should not be considered as manufacturing activity. However, the adjudicating authority held that the processes involved in transforming the steel plates and angles into a new finished product, known as centering truss, constitute manufacturing. The authority emphasized that the fabrication process brings into existence a new product, distinct from its original form, and therefore attracts duty liability upon completion of manufacturing.

2. The appellant further contended that the identity of the original products is not lost during the fabrication process, and hence, no transformation occurs. However, the authority rejected this argument, stating that the activities of cutting, welding, and drilling involve substantial changes to the steel plates and angles, resulting in the creation of a new product with its own name, character, and use. The authority cited the use of 144 tonnes of steel as raw material for the fabrication process, emphasizing that such activities, whether done on a contract basis or otherwise, amount to manufacturing under the Central Excise Tariff.

3. Additionally, the adjudicating authority upheld the invocation of the larger period for duty assessment due to the appellant's failure to obtain a Central Excise license and provide necessary information such as a classification list or price list. The absence of a license and relevant documentation hindered the department's ability to ascertain the nature of the appellant's activities, leading to the justification for invoking the larger period for duty assessment. As a result, the authority concluded that the appeal lacked merit and dismissed it, affirming the duty liability imposed on the appellant for the manufacturing activities undertaken.

In conclusion, the judgment by the Appellate Tribunal CEGAT, Mumbai, clarifies the distinction between fabrication and manufacturing activities in the context of Central Excise law, emphasizing the transformative nature of processes involving steel plates and angles. The decision underscores the importance of compliance with licensing requirements and providing necessary information to enable accurate duty assessment by the authorities.