2000 (11) TMI 495 - AT - Central Excise

Summary

Issues:
Whether duty of excise is leviable on Cold-Rolled Pattis/Patta.

Analysis:
The appeals in this case revolve around the issue of whether duty of excise is applicable to Cold-Rolled Pattis/Patta. The Appellants, engaged in manufacturing S.S. Pattas/Pattis, circles, and utensils, argued that they purchase duty paid S.S. Flats and utilize Modvat Credit under Rule 57A of the Central Excise Rules. They contended that the process of converting hot-rolled Pattas/Pattis into cold-rolled ones does not amount to manufacture, citing precedents like CCE v. Steel Strips Ltd. The Appellants also highlighted that they had paid duty at the circle stage and on waste and scrap arising from circles. They emphasized that no excise duty is payable on cold-rolled Pattas/Pattis as they are not being cleared. Additionally, they argued against the demand for duty on waste and scrap, citing relevant notifications and case law.

The Respondents, on the other hand, argued that as per the Explanation to Rules 9 and 49 of the Central Excise Rules, excisable goods utilized for manufacturing other commodities are deemed to have been removed before such utilization, necessitating the payment of excise duty. They contended that the Appellants did not raise the argument that the process of cold rolling does not amount to manufacture before the lower authorities. The Respondents also pointed out that the issue of manufacture was left open in a previous Tribunal case.

Upon considering the arguments, the Tribunal agreed with the Respondents that the removal of cold-rolled Pattas/Pattis for manufacturing circles constitutes removal of goods for excise duty payment under the Central Excise Rules. However, the Tribunal acknowledged the Appellant's argument regarding the deductibility of excise duty from the market price for determining the assessable value. The Tribunal noted that the crucial issue of whether the process of cold rolling amounts to manufacture had not been addressed by the lower authorities. Therefore, the Tribunal remanded the matters to the Adjudicating Authority to determine whether cold rolling constitutes manufacture as per Section 2(f) of the Central Excise Act and whether a new distinct product emerges from this process. The Adjudicating Authority was also tasked with deciding on other aspects like extended time-limit invokability, penalty imposition, and assessable value determination in line with relevant precedents.

In conclusion, all the appeals were allowed by way of remand for further adjudication on the pivotal issue of whether cold rolling constitutes manufacture, emphasizing the need for a thorough examination following the principles of natural justice and legal procedures.