2000 (2) TMI 479 - AT - Central Excise

Summary

Issues:
1. Confirmation of Central Excise duty and penalty imposition under Section 11A (1) of the Central Excises & Salt Act, 1944.
2. Classification of manufacturing process of Special Brazed Carbide Tipped Tools.
3. Applicability of Ministry's Circular dated 3-8-1973 on duty payment.
4. Mis-statement in classification lists leading to duty evasion and time limitation for raising demand.
5. Confiscation of Land and Building under Rule 173-Q of the Central Excise Rules.

Analysis:
1. The appeal was filed against the order confirming Central Excise duty and imposing a penalty under Section 11A (1) of the Central Excises & Salt Act, 1944. The Additional Collector of Central Excise had confirmed the duty amount and imposed a penalty along with ordering the confiscation of Land and Building under Rule 173-Q of the Central Excise Rules. The appellant contested the imposition, claiming they were only involved in the grinding process, not manufacturing the tool tips themselves.

2. The appellant argued that they were not manufacturing tool tips but purchasing duty paid tool tips and only undertaking the grinding process. However, upon examination, it was found that the appellants were mounting duty paid tool tips on steel shanks through a specialized process called brazing, followed by grinding as per customer requirements. This process transformed the tool tips into distinct Carbide Tip-tools, indicating manufacturing activity.

3. The appellant sought the benefit of Ministry's Circular dated 3-8-1973, which exempted duty payment on grinding ungrounded tool tips by actual users in their own factories. However, as the appellants were clearing the finished Brazed Carbide tools, not captively consuming them, the Circular did not apply to their situation.

4. The mis-statement in the classification lists by the appellants, where they failed to disclose the brazing process undertaken by them, was considered intentional to evade duty payment. This intentional misrepresentation justified the invocation of the extended period of limitation for raising the demand under Section 11A(1) of the Central Excises Act, 1944.

5. The impugned order included the confiscation of Land and Building under Rule 173-Q of the Central Excise Rules and a penalty imposition. The Tribunal upheld the order regarding penalty but set aside the confiscation of Land and Building, considering the facts and circumstances of the case. The appeal was disposed of accordingly.